East Coast property investors target Perth for affordability and rental yields

Momentum Wealth

Momentum Wealth reports 108% uptick in enquiry from interstate investors

  • Affordability and high rental yields have driven a 108% rise in interstate enquiries to Momentum Wealth for Perth properties
  • East coast investors turning towards alternative markets amid rising cost concerns
  • Interstate migration & strengthening economy underpinning further projected growth for Perth

Leading WA property investment firm, Momentum Wealth, says investors on Australia’s East Coast are setting their sights on the Perth property market attracted by affordable values, high rental yields and strong capital growth prospects.

Momentum reports a 108% uplift in enquiries from interstate investors in the first quarter of FY2022 compared to the same quarter in FY2021.

Ms Jennifer Wakeman, General Manager of Momentum Wealth, said, “The uptick in investor enquiry is being driven by the greater affordability of the Perth market amid rising cost concerns in the Sydney and Melbourne markets in particular.”

The latest Housing Affordability Report from the Real Estate Institute of Australia (REIA) highlighted WA as the most affordable state to purchase property in the June 2021 quarter behind the two territories, with only 26.5% of family income required to meet loan repayments – compared to 43.9% in New South Wales and 35.6% in Victoria.

“Investors looking towards Perth are not only benefiting from more affordable entry into the market, they’re also getting more for their budget in terms of land value, property size and proximity to the CBD – all key drivers of capital and rental growth,” Ms Wakeman said.

Perth property records gross yields of 4.4%

Perth is also trumping East Coast property markets for rental yields. Gross yields in the WA capital are currently 4.4% – among the highest across Australia’s state capitals next to Darwin, and above gross yields in Sydney and Melbourne of 2.4% and 2.7% respectively (CoreLogic) .

Ms Wakeman said, “There is no doubt the Perth property market is in a sweet spot for investors right now given the opportunity to leverage both yield and growth as the market moves further into its upswing.”

While tightening stock levels and sustained buyer demand have combined to deliver a strong performance from the market in 2021, Ms Wakeman said the current growth phase showed little sign of easing.

More growth predicted for Perth property

“Strengthening economic indicators, widespread skills shortages and ongoing low levels of stock are all favouring continued market growth,” Ms Wakeman said.

REIWA data showed that listings for sale have almost halved from their peak of 16,969 in November 2015, with just 8,513 properties listed for sale according to October weekly averages.

The need to fill WA’s high number of job vacancies is putting further pressure on shrinking housing stocks, with the Australian Bureau of Statistics (ABS) revealing over 52,100 job vacancies across the State in August.

Ms Wakeman said investors are recognising the opportunity to leverage further growth.

“Limits on cross-border movement mean it’s currently challenging to recruit interstate, but as borders open up there will be more interstate migration from skilled tradespeople and professional workers to fill roles, which will place further upwards pressure on housing demand and prices.”

“Many East Coast investors are recognising this, and are eager to diversify their property portfolios, and get into the Perth market while values are affordable to leverage this capital growth,” she said.

/Public Release. This material from the originating organization/author(s) may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).