Exploring the Perth Property Market and Investment Strategies

Perth Property Market in 2023

Although there was a slight decline in the overall number of property sales in 2023, there was a notable increase in the total value of sales, reaching an impressive $34.8 billion. This represents a 1.7% growth compared to 2022.

In 2023, the median house sale price reached a new high of $590,000 and although the median unit sale price remained steady at $408,000, there was an increase in demand for units in the inner-city areas due to the rise of infill housing developments.

With such positive indicators, the Perth property market continues to attract both local and international investors looking to capitalise on its steady growth and potential returns.

For those eager to explore the Perth property market, understanding the current trends, analysing market conditions, and staying informed about upcoming developments are essential. By keeping a close eye on the market and adopting well-informed investment strategies, investors can position themselves to make the most of the thriving property landscape in Perth.

Economic indicators

As of January 2024 the median house price in Perth was $660,790. And this figure is predicted to grow to around $690,000 by the middle of this year.

Perth rental properties have the highest yields among major Australian cities. The median house now delivers a gross yield of 4.4%, while apartments return 6.2%. And with a vacancy rate of 0.7% and a steady increase in rental prices, Perth remains an attractive market for property investors looking to secure long-term returns.

Population growth and demand

The city’s strong and diverse economy, with industries such as mining, agriculture, manufacturing, and tourism, has translated into steady job growth. This means a growing demand for rental properties and increased confidence in the rental market.

The city’s population growth has also been on a steady rise,  with a predicted increase to 3.5 million by 2050. This growth, coupled with a rising demand for rental properties and an increasing number of job opportunities, makes Perth an attractive location for property investment.

Infrastructure developments

Perth is currently undergoing major transformative infrastructure developments, including the $1.5 billion Perth City Deal, focusing on CBD revitalization, transport, job creation, and tourism. The project includes a $695 million investment in the State’s first inner-city university campus and a $105 million Perth Greater CBD Transport Plan. Simultaneously, the METRONET project, a $6 billion investment, will not only revolutionize public transport with 72 km of new rail and 23 stations but also boost the local economy and create jobs. With such infrastructure developments already underway, Perth’s property market is set to experience significant growth and attract even more investors.

Is it a good time to invest in the Perth property market?

Based on the current state of Perth’s property market,  investment in the city’s rental properties is strongly recommended. While the singular perfect time to invest does not exist, Perth’s property market is currently offering opportunities that are hard to resist. With a growing population, increasing job opportunities, and major infrastructure developments underway, the demand for rental properties is projected to soar in the coming years. Additionally, with relatively affordable prices compared to other major cities in Australia and a positive outlook for future growth, investing in Perth’s property market makes financial sense.

Best suburbs in Perth for investment

Armadale

PropTrack lists the median house price in Armadale at $385,000 which represents a massive jump of 24.2% over the past year. As one of the fastest-growing suburbs in Perth, Armadale offers affordable housing options with strong rental demand. The average rent for a house in Armadale is $450 per week, providing an attractive rental yield of 6.4%. Another thing to be aware of is the significant amount of infrastructure investment earmarked for Armadale in the near future, such as the improvement of the suburb’s public transport network and the addition of a new shopping centre.

Orelia

A suburb that appears on many investors’ radars, Orelia has experienced an 18.1% increase in median house prices over the past year. One of Perth’s most affordable suburbs, the median house price in Orelia is $420,000. Investors can also snap up a unit for a median price of only $209,000. According to REIWA, the average rent in Orelia is $500 per week. This makes Orelia an attractive option for investors looking to achieve strong rental yields.

Gosnells

The median house price in Gosnells has risen impressively by 20.9% over the past year, according to PropTrack. With a range of affordable housing options, including units with a median price of $329,500 and houses with a median price of 450,000, Gosnells is a popular choice for investors. In addition to its affordable housing options, Gosnells also boasts plenty of amenities and services, such as good schools, shopping centres, and public transport options that make it a desirable location for renters. This is reflected in the suburb’s strong rental demand, with an average median rent of $470 per week for houses and $400 per week for units.

Market Forecasts

Perth’s property market had a remarkable 2023 with a 25.6% increase in the median property price during the post-pandemic boom. The fact that over 98% of the house and unit markets across Perth rose in value is a testament to the strength and resilience of its property market.

Experts suggest that Perth remains a hot market, with factors such as tight rental conditions and lower-than-normal property listings pointing to a significant undersupply. This is a strong indicator that Perth’s property prices and rental yields will continue to rise over the next few years.

Buyers, keen on entering the market, are encouraged to do their research and act fast, or risk getting priced out.

Summary

Significantly more affordable than the likes of Sydney and Melbourne, Perth’s property market is well-positioned for continued growth. The undersupply of houses coupled with predicted population growth means that now is an excellent time to invest in the Perth property market. Long revered as the ‘City of Light’, Perth offers a unique and vibrant lifestyle. And as the city continues to evolve, so too will its property market, solidifying its place as a top Australian destination for property investment. With positive forecasts ahead and a strong track record of growth, the Perth property market is definitely one to watch in 2024 and beyond.