Perth, the vibrant capital of Western Australia, has emerged in 2023 as a hotspot for property investment, outpacing other cities in terms of capital growth. And, it looks like that trend is to continue in 2024. A confluence of factors makes Perth a market to watch for both local and interstate investors.
A Thriving Hub of Growth and Opportunity
Since the 2021 market downturn, Perth has delivered some of, if not the, highest capital growth in Australia. As of 31 October 2023, Perth’s capital growth rate over the past 12 months reached 10.8% according to CoreLogic, surpassing Sydney’s 9%, Brisbane’s 7.8%, and Adelaide’s 6.5%.
The city’s positive outlook stems from numerous factors, including government initiatives and investment, urban transformation, population surge, supply constraints, rental market dynamics, and overall affordability.
Western Australia’s Infrastructure Boom
Western Australia’s government is set to inject a staggering $39 billion into the economy, fostering growth in construction, job creation, and overall economic improvement over the next four years.
The spend includes massive investments in road, rail, and transport $13.6 billion, including $5.9 billion for Metronet, $6.7 billion for roads, and $250 million for electric buses. Perth’s Metronet project is going to provide 23 new train stations and 72 kilometres of new rail. And 16 level crossings will be removed. A similar program in Melbourne has led to large-scale urban renewal. The $1.66 billion Perth City Deal will also see investment to transform the city, creating jobs, and enhancing overall infrastructure.
According to the ABS, Western Australia leads the nation in population growth, boasting a 2.8% increase for the year ending March 31, surpassing other states. And there is no sign of this slowing. The WA State Government has anticipated the population of the state will grow from 2.7 million today, to 4.3 million by 2042, a 60% surge, primarily driven by net overseas migration. Net overseas migration contributed the most towards WA’s population growth by 52,664, 14,557 from births, and a further 11,121 from interstate migration. As WA’s statewide investment projects unfold, this will offer improved facilities, schools and infrastructure, which will improve Perth’s quality of living standards, further adding to the desire to live in Perth by interstate and international people.
Perth offers more affordable housing and unit prices compared to other capital cities, making it an attractive destination for investors. Sydney and Melbourne have long been the most sought after and well-regarded cities for investors due to strong capital growth however many are not seeing the value due to rising costs of living, suppressed borrowing power and affordability constraints.
According to SQM Research, Perth has hit a record low vacancy rate of 0.4% for October 2023 which suggests significant shortages in available rentals, indicating a likelihood of rising rental prices and sustained high yields. This will prove to be extremely beneficial for anyone wanting to enter the market with the goal of holding a property that is potentially neutrally and or positively geared.
Need a Perth Buyer’s Agent?
If you’re thinking of investing in Perth or looking for your dream home, now could be your chance. Cohen Handler can assist by helping you secure properties off and on-market, carry out due diligence, suburb recommendations, strategic negotiation, and work meticulously to advance ahead of the strong buyer competition within Perth’s market. Get in touch with us today for a free consultation.