by Brenda Ledwith on Friday, 10th of January 2020
If you’re the current owner of an investment property, or perhaps you’re planning to make 2020 the year to kick start your property portfolio, the Perth property market looks set to present an exciting year of opportunity for savvy investors who can recognise the signs of a resurgent market.
A New Decade of Investment Property Growth in Perth
It’s hard to believe we’re now in a new decade, but with fresh beginnings come fresh opportunities for snapping up ideal investment properties within the growing Perth market. Last year, the feature story of the WA real estate industry was that the rental market outperformed the sales market, with median rents sitting at $350 per week since April 2017, becoming the longest period of stable rents since 2001. This stability is reflected in the 32 consecutive months and counting of unchanged median rent prices currently experienced in Perth’s property market.
Healthy Signs for Perth Investors
Property experts are feeling quietly confident about the year ahead. With property prices enjoying a slight increase towards the end of 2019, and a low vacancy rate sitting at 2.3%, Perth is primed for a year of growth for property investment experts.
Affordability is a major driver in the appeal of the Perth property market. Perth, as a capital city, presents an attractive option for local and interstate investors in 2020 due to the levels of affordability being the highest it’s been since Quarter 3 of 2004. Perth is currently more attractive, from an affordability standpoint, when compared to both Sydney and Melbourne.
What Are the Signs to Look Out For?
In a simple case of supply versus demand, stock levels will play a considerable part in the potential growth of the Perth rental market, both in terms of returns and rental prices. The number of rental properties available in Perth dropped to 7% in December 2019, down 18% lower than the year prior, indicating a growing level of market demand.
The Perth vacancy rate currently sits at just 2.3%, which is the lowest level since February 2019. With low levels of stock available, mixed with healthy demand and stable rents, the current market conditions have forged an ideal environment for Perth property investors to make 2020 their year for strong rental returns and growth.
ANZ senior economist Felicity Emmett further added that Perth’s vacancy rate suggests future growth by stating, “We’ve also seen vacancy rates fall quite dramatically. They’re now down below the national average – that also suggests the environment for growth will be positive.”
With a series of new projects and activity emerging from Western Australia’s mining sector, we can expect to see a boost in future job prospects to support the growing population. Combine this with low levels of available stock and lowering unemployment rates, 2020 looks primed for consumer confidence to prosper, a key driver for growth and opportunity within the Perth property market.
Rent Increases on The Horizon
With increased consumer confidence and lower stock levels, we would expect to see a boost in weekly rents, which currently sits at a median price of $350 per week.
REIWA President Damian Collins commented on the factors contributing to this predicted increase by explaining, “If listings continue to decrease, new build stock continues to decline and leasing volumes remain healthy, we should see the overall median rent price gradually increase.”
Watch This Space!
Whilst there are always a multitude of factors which will ultimately contribute to market conditions, it is clear that a revival of the Perth property market is on the cards in 2020. WA property experts are feeling more positive for the year ahead, and with growing consumer confidence, it is an exciting time for investors.
Need Our Help to Make 2020 Your Year Of Prosperity?
Whilst it’s clear that Perth’s favourable market conditions present an ideal year of opportunity for property investment specialists, it pays to have the right team managing your most valuable assets. If you’re thinking of listing your property we welcome you to contact us to discover how we can help you take full advantage of Perth’s current market conditions.
Unsure who we are and how we are different? Check out our recent blog which outlines why we were awarded 2019 Residential Property Management Team Of The Year and 2019 Residential Property Manager Of The Year at the recent REIWA Awards For Excellence.