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Perth’s property market is set to experience sustained growth, both in terms of property prices and rental income. Find out why you should consider investing in WA.
Sustained population growth and major infrastructure projects are having a significant impact on Perth property prices right now. Traditionally a ‘boom and bust’ property market, WA now looks poised for a sustained period of growth.
There are unique opportunities available for savvy Perth property investors.
It’s no secret that there’s a current housing supply crisis across most Australian property markets, and Perth is certainly not immune from this national trend. Demand for rental properties significantly exceeds supply, which is not only pushing Perth property prices up, but landlord rental income as well.
Western Australia’s population is currently 2.8 million and it is projected to increase to 3.3 million within the next 10 years and to 3.75 million within the next 20 years. That’s almost a million extra people. Despite WA’s vast geographic area, 80% of the population live in the Perth/Bunbury region.
Australia currently has record migration levels and Perth is proving to be an attractive destination. In fact, Perth’s skilled migrant intake is higher than the national average and is forecast to remain higher for at least the next five years.
The resource-based WA economy is strong and forecast to have sustained growth, unlike the largely finance-based economies of Sydney and Melbourne on the east coast. The next commodity boom is forecast to occur later this decade and be driven by iron ore and lithium, which are two of Western Australia’s most significant resource deposits.
Besides population and economic growth, the other major factor influencing Perth property prices in the short-to-medium term is the significant slowdown that has occurred in building approvals and construction. Despite the high demand, the slowdown has been caused by labour shortages and increased building costs. These issues are likely to stabilise and improve over time.
All these factors should ensure both strong population growth and high Perth property demand for the foreseeable future. According to the latest figures from the Real Estate Institute of Western Australia, Low vacancy rates are likely to remain a feature of the market for several years.
Perth’s rental property vacancy rates are at their lowest level in 42 years
WA’s demographic trends also support sustained population and property price growth. Despite having an ageing population like the rest of Australia, more children are likely to be on the way in the short-to-medium term due to the influx of young migrant families, along with higher education students who may end up settling permanently.
Migrants are increasingly coming to Western Australia from India, the Philippines and South Africa, and their average age is early 30s, which is lower than the average age of migrants coming to Australia in general.
This demographic renewal is likely to see Perth property demand being the strongest in outer suburbs like Alkimos to the north-west, Eglinton to the north, and Kennedy Bay and Lakelands to the south-west. The population of all these areas is forecast to grow by more than 20% in coming years, as are the outer suburbs to the south-east of the Perth CBD.
Traditional inner-city suburbs on the other hand are only forecast to grow by 6 to 8%.
Infrastructure projects also help to drive property prices and Perth’s forecast population growth has seen several major projects commence, be completed or be announced in recent years, including:
All these projects are designed to boost Perth’s liveability as its population swells by more than 33% over the next 20 years. It will be fascinating to watch the city evolve, and savvy property investors will be able to capitalise on the favourable conditions that exist in the market right now.
DPN has a range of house and land packages to build high yield investment homes in Perth’s price growth areas, including Alkimos. Our team at DPN can help you with all aspects of property investment, finance and property management.
Contact us today to find out more.
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