Western Australian-based property investment consultancy, Momentum Wealth, has reported a significant rise in enquiry from interstate buyers as WA's residential property market continues to heat up.
This comes as Perth was revealed as the fastest growing major market across Australia in CoreLogic's January Home Value Index, with prices up 1.6% across the month, and 3.8% compared to three months prior.
Momentum Wealth Buyer's Agency Team Leader, Emma Everett, said the rise in interstate enquiry, up 164% for the final quarter of 2020 compared to the same time the year prior, was a result of increased interest from investors, as well as buyers looking to re-locate to Perth following the COVID-19 pandemic.
"For investors who have benefited from recent upswings in their own market, there's certainly a great opportunity to leverage WA's affordability and enter the Perth market to take advantage of its respective growth cycle, and I think many investors are now recognising this could be a time-limited opportunity" she said.
A number of industry experts, including Westpac Chief Economic Bill Evans and SQM Research's Louis Christopher, have forecast Perth will outperform national price growth in 2021, with ANZ also predicting that the state capital will lead the nation with price rises of 12%.
Ms Everett said tightening conditions within Perth's rental market also meant investors were in a position to benefit from a stronger yield play.
"While we are beginning to see sustained growth in property prices, WA is currently one of the most affordable states to buy across Australia which, combined with a significant tightening of rental stock and initial rent increases, has had a positive impact on rental yields."
"Our buyer's agents are seeing houses with strong underlying land value that are also achieving yields of 4.8% - 5.5%, or even greater in some cases for properties with a dual-income strategy" she said.
Not all areas performing equally
Ms Everett said while conditions were ideal for interstate investors considering a Perth investment, area and property selection would remain critical for those looking to benefit from the market upswing.
"Particularly in a recovering market, not all areas improve at the same rate, and there are some locations that may not have the right factors to support strong capital growth, so it is still very dependent on suburb and even individual property selection."
"Likewise, we have seen that performance can also vary quite significantly depending on property type, so our advice to investors is to buy selectively, and if you aren't familiar with the local market, engage someone who can offer that local expertise to guide you in making the right investment decision," she said.
