Investors looking to jumpstart their residential property portfolios with the growing market, according to a new study, would do well to consider the outskirts of Perth.
As the latest lending figures from the Australian Bureau of Statistics show that Western Australian investor lending soared 87% in October from a year ago, REIWA has released data identifying the best places to invest in Perth.
A series of outlying areas dominate the list of the top 20 suburbs with the best investment prospects based on strong price growth and rental yield in the 12 months leading up to November, with Leda taking the top spot.
The southern community recorded a median selling price of $ 320,000 (up 16.37%), a median rent of $ 420 per week (up 35.49%) and a gross rental yield of 6, 83%.
Parmelia, Medina and Orelia – also in the town of Kwinana – as well as the southeastern suburb of Armadale and Greenfields in the Peel region were other suburbs with a rental yield of at least six percent.
Coulson & Co real estate licensee Michael Coulson said there has been a marked increase in investor activity across the Kwinana area over the past year, with a further increase in the two months as rental yields continued to rise and made rental yields even more attractive.
“Much of this activity comes from interstate investors, buying agents and a number of investment agencies,” he said. “Leda, Parmelia and Orelia all generate great interest among investors.
“Key features sought include brick and tile homes with side access for potential for subdivision or grandma’s apartment, ideally minimal maintenance or renovations required and offering a gross rental yield of up to minus six percent. “
Meeting these criteria, a three-bedroom, one-bath house on a 733m² block at 25 Skottowe Parkway, Parmelia, which attracted several bids in a three-week sales campaign and sold to an interstate investor for $ 323,000.
REIWA Chairman Damian Collins said a combination of strong rental yields and affordable real estate prices are attracting investors from the local and eastern states to the outer suburbs of Perth.
“Interstate investors think it’s really amazing that you can buy Perth property within a 30-50km radius of the city for around $ 300,000, which is unheard of in Sydney and Melbourne,” a- he declared.
Mr Collins said it was cheaper to buy than to rent a home in those areas, with some tenants making the leap into homeownership.
However, the impending opening of Washington state’s borders and the subsequent influx of migrants into the state would put further pressure on Perth’s tight rental market.
“We’re also going to see a lot more house completions next year thanks to all of these building grants given in 2020, which could free up around 8,000 rental units, but if we get 30,000 to 40,000 migrants – like us. are potentially waiting for it – that will absorb any available rental inventory very quickly, “Collins said.” We still have a very low vacancy rate, so we expect there will be a shortage of rental property in 2022. , which will lead to a further increase in house prices and rents. “
Slightly missing a spot on REIWA’s list, Yanchep in north Perth recorded a median selling price of $ 435,000 (up 11.54%), a median rent of $ 450 per week (up from 18.43%) and a gross rental yield of 5.38%.
But the outer coastal suburb was ranked 11th in the 20 best places to invest in Australia by ME Bank based on research from planning and economics firm Ethos Urban, which examined population growth, prices of real estate and rental, rental yields, transport infrastructure and the attractiveness of a suburb for tenants.
Ellenbrook, in Perth’s northeast and western suburbs, Claremont, also made the cut.
“Ellenbrook’s new growth area, with its wineries and planned estate, took sixth place thanks to WA’s investment in the Ellenbrook Rail Extension, connecting more than five suburbs,” said Chris McNeill , ME Bank Consulting demographer.
“The beautiful beaches and coastal township of Yanchep are also expected to benefit from the Yanchep rail extension, making the trip to Joondalup just a 30-minute journey, while Claremont (in 16th place) will benefit from the upgrade from Claremont train station, making it a perfect residential area for apartment investment.