Source: The Real Estate Conversation
Heated residential property markets and rapidly rising house prices in Sydney and Melbourne over the last few years have led many investors to look further afield to identify hotspots with affordable prices and potential for capital growth.
Today’s property investor needs to have a broader outlook and research properties outside of capital cities and even in other states in order to secure investment properties that will tick all the boxes – affordable, good entry level pricing, solid rental returns and growth forecasts.
With a median house price of just $510,000, Perth currently presents an incredible opportunity for those locked out of the Sydney and Melbourne property markets.
And now is the time to act. Unlike the rest of Australia, Perth’s median house price is currently the same as it was in December, 2009. Just like the property boom never happened.
Perth’s median house price matched Sydney’s a decade ago in March, 2017 yet it now sits at just 58% of Sydney’s according to Eight Capital Cities by Australian Bureau of Statistics.
Most analysts agree that Perth is now at the bottom of the property cycle. Quite simply – you make your money when you buy as the only way the price can go from here is up.
Perth is Australia’s “quiet achiever” that continues to excel across key economic indicators yet somehow stays out of the spotlight.
Despite this, it ranked 7th in the Top 10 most liveable cities in the world in the Global Liveability Report 2017, boasts strong employment growth and some of the highest wages in Australia coupled with a government that is committed to boosting infrastructure spending. This is a perfect combination for savvy investors.
Perth has more than bounced back from the end of the mining boom. According to the Australian Bureau of Statistics, more than 34,000 full-time jobs have been created in Western Australia over the last six months alone. The wages story is equally positive with employees in Western Australia earning an average of $1,715 per week.
The population growth story is also a positive one for investors, with Perth earmarked to become Australia’s third largest capital city by 2034 after Sydney and Melbourne. Perth has the highest forecast population growth of all Australian cities – at 3.05% according to research firm McCrindle.
There is the potential for a supply shortage in the Perth residential sector with available properties for sale at the lowest point in two years – combined with strong forecast population growth with Perth needing a further 800,000 homes to accommodate 3.5 million people by 2050.
The icing on the cake for investors is that the Western Australian Labor Government has a focus on infrastructure development, job creation and debt reduction.
The $4 billion Metronet is the first major infrastructure project the government is looking to introduce.
Other significant infrastructure projects in Perth include the $5.3 billion Perth City Link, $2.6 billion Elizabeth Quay, $2.1 billion Riverside project and $821 million Perth Stadium.
Perth ticks all the boxes for investors – low prices, strong demand and population growth. With the outlook so bright, it won’t stay at the bottom of the cycle so investors need to do their research and act fast to get the best in the West.