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Perth Property Investment

Over the past year, the Perth property market recorded value growth of just three per cent, according to RP Data. This poor property investment performance in Perth seems to have slowed further in recent times - over the June quarter, investment property values stagnated with house prices rising by just 0.2 per cent and units staying flat, Australian Property Monitors reports.

Data from the REIWA suggests buyer activity has eased in the first half of the year with the later part of 2014 showing no signs of improvement. The rental market is also faltering, with rising vacancies and falling rents.

RP Data notes that less people are moving to the west coast, with interstate migration falling by 56 per cent over the past year. Property analysts suggest the mining downturn means Perth is attracting fewer workers from other states.

The construction sector may also take a hit in coming years. BIS Shrapnel predicts residential construction will fall by five per cent over the next three years, reflecting decreased investment in the mining sector.

Resource-rich towns in WA are seeing low levels of property investing activity in the current economic climate.

The Perth rental market is stacked against landlords and investors as vacancies rise and rents continue to fall. Over the June quarter, the median rent declined by $10 to $450 per week, according to the REIWA. Their data shows listing numbers are up by 30 per cent in the past 12 months and the vacancy rate has crept up to 4.2 per cent.

An RP Data report shows rent for Perth houses dropped by five per cent over the past year. Units are following a similar trend, dropping 5.3 per cent over the period.

Projections: 2015 and beyond

Despite warnings by valuation firm Herron Todd White that Perth's inner city may suffer from an oversupply in 2015, some property analysts say these fears are unfounded, that upcoming tighter Governmental regulation and financing requirements will ensure builders meet, rather than exceed, buyer demand.

We have had strong property market growth over the past 12 months and Perth has experienced a significant increase in unit development and a lot of construction is underway. There is a down turn in the mining sector and this is having some effect on the rental market. However, we should see renewed activity in oil and gas in WA taking up some of the slack.

Contact us for more information on recommended suburbs and locations in the Perth property investment market.

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