Why Perth is top of mind for property investors
Perth has emerged as a fan favourite among property investors, with the timing of the market and the forecasted price growth said to be behind the city’s newfound fame.
Momentum Wealth’s 2021 Property Sentiment Report has revealed a huge uptick in Perth’s popularity with as many as 48 per cent of surveyed investors selecting Perth as the best location to purchase an investment property.
According to the new research paper, based on a comprehensive countrywide investor survey, Perth was seen as the best place to purchase an investment property in the next 12 months, an 11 per cent increase in sentiment from last year’s survey.
Investors who favoured Perth stated the timing of the market and forecast price growth as two key factors behind their thought process.
Local sentiment towards the Perth market has also increased, with 78 per cent of Perth-based investors selecting their home city as the best location to buy property, up from 56 per cent in the previous survey, Momentum Wealth revealed.
Speaking at a recent episode of The Smart Property Investment Show, Damian Collins, the managing director of Momentum Wealth and president of REIWA, explained that Perth’s current market demand is chiefly driven by local owner-occupiers. In fact, according to Momentum Wealth’s estimates, investors sit at some 15 to 20 per cent of total purchases.
But, Mr Collins explained, this is soon tipped to change.
“So, right now, it’s owner-occupier led, but now we’re coming out of the rental moratorium. In the west, things are going back to normal. Rents are going to spike probably 15 plus per cent. I’d be shocked if we didn’t see a big jump in investors coming into the second half of 2021,” Mr Collins noted.
Other elements supporting Perth’s growth in popularity include the uptick in the mining sector and the flow-on effects to the economy, as well as Western Australia’s relative safety from COVID-19.
“If mining’s on, the mining wages are very high. In fact, Perth has the highest outside of Canberra and all our tax dollars paying the public servants, Perth has the highest wages in the country and that’s because of the skilled labor in the mining sector,” Mr Collins explained.
Brisbane not too far behind
Brisbane took second spot on Momentum Wealth’s best locations to invest in ladder. According to the company’s survey, 24 per cent of investors voted Brisbane as the best location, with as many as 38 per cent noting they are actively looking to invest in Queensland’s state capital within the next 12 months.
“I think Brisbane is a city that is going to be a solid performer, but it certainly was the second most popular amongst our survey participants in terms of investing,” Mr Collins said.
But for Brisbane to catch up to its capital city counterparts, Mr Collins noted that it will need to develop its own unique point of difference.
“Brisbane has a bit of mining, but nothing like Western Australia. So, it’s got to develop its own unique point of difference.
“It’s got the population growth, so that’s always going to help with the property prices and it’ll make it a solid performer, but I’m struggling to see the economic driver that’s going to make it perform better than perhaps Sydney or Melbourne over the long run,” he concluded.
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