Perth property owners using market growth to kickstart investment portfolio

Momentum Wealth
  • Perth owners leveraging market conditions to expand portfolio
    • Low interest rates among driving factors of 86.35% increase in investor finance in WA
    • Growth in property market tipped to continue

    A rising number of Perth property owners are taking advantage of the market’s growth to expand their property investment portfolio, according to property advisory, Momentum Wealth.

    In early October, national research firm CoreLogic released revised figures for Perth’s residential market that revealed strong annual price growth of 18.1%.

    Team Leader of Finance at Momentum Wealth, Caylum Merrick, says property owners are leveraging these conditions to their advantage.

    “With Perth property values recording sustained growth over the past 12 months, many owners have benefitted from an uplift in equity in their property and are seeing this as an opportunity to review their financial position,” he said.

    “We’re working with an increasing number of investors, both existing and first-time, who are looking to leverage this equity to fund an investment purchase or consolidate their position while interest rates are at record lows,” he said.

    This comes as data from the Australian Bureau of Statistics revealed that investor loans in WA had increased by 86.35% in August 2021 compared to the year prior.

    “We have also witnessed similar growth in investor demand, with many investors recognising the unique opportunity at hand to capture both growth conditions and strong rental yields, with Perth continuing to offer some of the most competitive rental yields across the nation,” Mr Merrick said.

    More growth anticipated for Perth market

    Mr Merrick said further anticipated growth in the Perth market was another reason for investors to move sooner rather than later.

    “There’s no sign the current growth phase has run its course, with increased mining activity, widespread skills shortages and ongoing low levels of stock all favouring market growth,” he said.

    Mr Merrick said investors who act now would be in a position to leverage further improvements when the state’s borders re-open.

    While listings for sale have almost halved from when they reached a peak of 16,969 in November 2015, the market also continues to record sustained demand from buyers, with an average of 970 properties sold per week in October according to REIWA.

    “Investors who act now are likely to be in a stronger position to capture further increases in demand that will come with the easing of border restrictions,” Mr Merrick said.

    The right investment strategy is crucial

    For those who want to jumpstart their property portfolio on the back of current opportunities, the advice is simple.

    “Property investment isn’t a one-size-fits-all approach,” Mr Merrick said. “Having the right strategy in place and the correct loan structure is an imperative.”

    “Our property investment specialists are working with clients to leverage the opportunities on offer, tailoring strategies based on each client’s specific position and goals, and then making sure they have their loans set up correctly to maximise flexibility and minimise their investment risk,” he said.

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