Perth Property Investment Update 2022

Here, we break down the key aspects to understand before investing in Perth and what makes this an opportunity beneficial for all investors.

Perth Housing Market

Perth’s housing market has historically been steady, with both house and unit prices not seeing great fluctuations in the median prices in the last 10 years.

As 2020 saw housing markets across the country impacted by COVID-19, Perth was no exception. The median house and unit prices In June 2020 indicated the effect of COVID-19 on the city’s property market as both figures saw a decrease. Perth property prices recorded their lowest median since September 2011 and regional prices hitting their lowest since September 2018.

Source: Median price (unstratified) and number of transfers (capital city and rest of state)

However, 2021 has seen Perth’s property market experience growth as the property market recorded a 4.2% in the quarter up to April 2021.³ Following the strong growth in the first quarter of 2021, CoreLogic has reported that Perth’s property market has continued to grow by an additional 1.1% in May 2021, and overall is seeing an 8.45% increase in property prices compared to May 2020.⁴

The figures that Perth’s property market has recorded in late 2020 and to start 2021, has led REIWA to forecast WA’s housing market to continue this growth as the state is expected to grow by 15% this year.⁵ As Perth’s housing market continues to grow at a healthy pace, compared to historical figures, now is a great time to invest in this city.

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Perth Economy and Infrastructure

Being the state’s capital city, Perth is the driving force behind WA’s economy contributing the most to the state in terms of employment and overall economic activity. The greater Perth region of WA accounts for 76.31% of all employment in Western Australia.⁶

During the peak of COVID in the June and September quarters of 2020, the unemployment rate of greater Perth increased from 5.4% to a peak of 7.7%.⁷ However, the city and economy began to recover towards the end of 2020, as the unemployment rate recorded a decrease in December to 6.8%.⁸

As a direct response to the pandemic, the City of Perth released a COVID-19 Economic Rebound Strategic outlining immediate and long-term support for businesses, residents and the wider community to ensure that Perth’s economy recovers and thrives from the negative impacts the pandemic had on the economy.⁹ A component of the city's economic recovery and future growth will be the major infrastructure projects that are being planned and undertaken to unlock further economic opportunities and improve the livability of the city.

Some of the major infrastructure projects occurring in and around the city of Perth include:¹⁰

Perth City deal

A $1.5 billion partnership between the Commonwealth Government, WA Government and the City of Perth to re-energise the city, bringing Government and private investment into the CBD and creating almost 10,000 jobs.
Perth City Link

A series of projects to sink the northern rail line and create a 13.5 hectare site between the erth Arena and Horseshoe Bridge.
Elizabeth Quay upgrades

The Metropolitan Redevelopment Authority is working on upgrading the infrastructure of Elizabeth Quay. This project will include the creation of 10 private lots, an inlet that brings Swan River into the city, refurbishment of Barrack Square and many other improvements to transform this area.

Property investor guide

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Perth Rental Yields

Rental yield is one of the most important figures to understand when investing in a property. It is essentially the amount of money you make on an investment property by measuring the gap between your overall costs and the income you receive from renting out your property.

While 2020 affected the housing market in terms of property prices, Perth’s rental market actually recorded increases in their gross rental yield across both houses and units. The gradual increase in rental yield Perth experienced in 2020, has continued in the first half of 2021, with houses and units hitting a high rental yield during this period of 4% and 5.3%, respectively, in June 2021.¹¹

As Perth’s property market continues to see increases in both property prices and rental yields, now is a great time to look at investing in this city as the opportunities continue to grow.

Best Suburbs in Perth to Invest:

There are of course many suburbs in Perth that are great locations to begin or grow your investment portfolio. Through our analysis of Perth's property market, we have identified suburbs in the high, medium and low end that may be a great opportunity to begin your investment journey with. These 3 suburbs were chosen due to their proximity to the CBD, historical property growth and potential rental yields and may serve as a guide that we believe can provide strong results if you’re looking to invest in property.

Busselton, 6280

Key Stats	House	Unit
Median buying price	$500,000	$360,000
Median rent (per week)	$400	$395
Rental Yield	4.2%	5.7%
Distance to CBD	222km

Source: https://www.realestate.com.au/neighbourhoods/busselton-6280-wa

Located 200km from Perth’s CBD but only a 2 hour drive, Busselton is a coastal town that is quickly becoming a popular destination for investors. As working from home is becoming more popular and with the infrastructure upgrades to the town’s airport making direct flights from the East Coast possible, Busselton’s popularity is expected to grow.

With property prices under the city’s median and rental yields higher than the average in both houses and units, Busselton provides investors with a great opportunity to invest in this affordable suburb.

Forrestfield, 6058

Key Stats	House	Unit
Median buying price	$420,000	$312,500
Median rent (per week)	$395	$313
Rental Yield	4.9%	5.2%
Distance to CBD	20.6km

Source: https://www.realestate.com.au/neighbourhoods/forrestfield-6058-wa

Located 20km outside of Perth’s CBD, Forrestfield is a great opportunity for those looking to invest in an affordable suburb with a strong rental market. With low property prices and high rental yields, Forrestfield has experienced strong annual growth of 15%,¹² showcasing the value this suburb can have to any potential investors.

Kelmscott, 6111

Key Stats	House	Unit
Median buying price	$387,500	$210,000
Median rent (per week)	$310	$290
Rental Yield	4.2%	7.2%
Distance to CBD	30.1km

Source: https://www.realestate.com.au/neighbourhoods/kelmscott-6111-wa

Similar to Forrestfiel,d Kelmscott is located just outside the CBD of Perth and is currently experiencing strong growth in its property market. In May 2021, the median housing prices in Kelmscott recorded a 34.52% increase over the same period in 2020, while units recorded a 13.21% increase.¹³ Despite these boosts in property prices, the compound growth rate over the past 5 years for Kelmscott are decreases of 0.1% for houses and 5.9% for units.

Therefore the property prices in Kelmscott are currently at affordable prices, despite their growths and continue to achieve high rental yields for any investor.

How to invest in the Perth property market

If you’re ready to start investing in Perth, the next step in your journey is to speak with a broker to apply for an investment loan.

For your first investment property, we have created a beginners guide to outline the main factors you need to consider and the costs involved here.

When applying for an investment home loan, it is best to understand what type of loan is right for you and the associated rates. You can compare investment loans across multiple lenders from our panel here or speak to a Mortgage Choice Broker who can go through your situation, compare the loans available and find the loan that’s right for you.

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Of course, this is only a starting point, as there are many areas in Perth that can offer similar or greater investment opportunities. If you’re interested in investing in Perth and are ready to get the process started, it is best to speak with your local Mortgage Choice broker to get expert advice on your property investing journey.