‘Seismic shift’ towards Western Australia shows no signs of slowing
New research reveals that when it comes to property, Australian investors believe that west is best.
The latest client data from MCG Quantity Surveyors found that Western Australia is a goldmine for real estate investors.
Comparing statistics from the first quarters of 2022 and 2023, the firm found that investor activity in Western Australia has experienced a massive jump.
In the first quarter of 2022, 9 per cent of Australian investors were active in Western Australia. Come first quarter 2023, that number had risen to an astounding 32 per cent.
Mike Mortlock, managing director at MCG, believes that this boom “has come at the expense of New South Wales and Queensland”.
As the Property Investment Professionals of Australia’s (PIPA) 2023 Investor Sentiment Survey showed, investors are increasingly perceiving the eastern states as hostile.
In Western Australia, however, the MCG data found that the state “saw its proportion of investor transactions double during that period”, and one in four PIPA respondents picked Perth as their top capital city.
So, why is Western Australia so popular? According to Mr Mortlock, it comes down to three key factors.
Politics
Mr Mortlock observed that “the perceived and actual impact of state government policy is affecting investor sentiment”.
He noted “Queensland and Victoria have been implementing rigorous tenancy legislation,” and he feels this “talk around limiting or freezing rents has put investors on edge”.
Even when legislation changes are retracted, Mr Mortlock believes that “the threat of legislation can be enough to decimate a rental pool”.
“It’s obvious from the data and our discussions with clients that Western Australia is considered a far more ‘investor-friendly’ state than wither Queensland or Victoria,” he said.
Population
When it comes to internal migration, data shows that Western Australia knows how to draw a crowd.
According to the latest analysis from the Australian Bureau of Statistics, over 35,000 people left NSW and Victoria between March 2022 and March 2023. In the same year, Western Australia’s internal migration rose by 10,000.
Mr Mortlock shared that “this influx of new ‘Westerners’ is fuelling demand for accommodation in what is already a tight rental market”.
“The current rental vacancy rate in Perth is just 0.4 per cent, which makes it the nation’s tightest capital city market.”
Price
The final point in Western Australia’s favour is its affordability.
According to CoreLogic, the median dwelling value in Perth in September 2023 was $618,363 – a “staggering 45 per cent lower than Sydney’s,” Mr Mortlock said.
“Relative affordability combined with excellent underlying fundamentals is a magnetic combination when it comes to attracting investor dollars.”
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