- 76% of Queenslanders believe their capital is the best city to invest in nationally
- 78% of West Australians say Perth is the best
- Both cities have benefitted from a tightening rental market and higher mining activity
Property investors in Brisbane and Perth are most bullish about their local markets over the next year.
76% of Queenslanders believe their capital city is the best place to invest in across Australia, while 78% of West Australians consider Perth to be the top location nationally, according to survey into property investors sentiment.
The findings come from Momentum Wealth, a WA-based property investment consultancy.
Jennifer Wakeman, Momentum Wealth’s General Manager, said it was likely numerous factors had a role to play in this high level of sentiment.
“Perth and Brisbane share similar growth characteristics with both markets benefitting from tight rental and sales markets and an uptick in mining activity.”
“Population resilience throughout the pandemic has also benefitted Perth and Brisbane, and this is placing further pressure on these tight property markets.”
Jennifer Wakeman, Momentum Wealth General Manager
48% of total respondents selected Perth as the best capital city market for investment property over the next 12 months. This represents an 11% increase in investor confidence compared to the last survey. Along with mining, the state’s response to the pandemic has been cited as a factor for this level of confidence.
“After several years of downturn, WA investors are now seeing sustained growth, and confidence in the long-term prospects of the market is reflected in the high number of local investors who view Perth as the best place to invest.”
“Western Australia has seen a resurgence in mining activity which, coupled with the State’s effective response to the COVID-19 pandemic, has helped buoy the economy and provided a boost to investor confidence.”
The survey found, however, that the two largest cities in the nation have recorded a fall in investor confidence.
Only 10% viewed Melbourne as the best location to invest in, a fall of 7%. Sydney saw only 8% of investors confident in the largest capital city’s property investment market.
Traditionally, demand for property in Sydney and Melbourne has been heavily influenced by migration, according to Ms Wakeman. In light of borders closing a year ago, this source of demand evaporated overnight.
“The Sydney and Melbourne markets have recently benefitted from high levels of overseas migration.
“However, this exposed them to greater downside risk when international borders closed, leaving them more vulnerable to an influx in supply compared to markets like Perth where these levels of demand have been much lower.”
However, despite the inner-city markets weakening, both Sydney and Melbourne’s markets have performed better than expected due to increased owner-occupier activity, especially at the top end-market, although not enough to restore confidence.
“However, investors remain largely absent from these two markets as they turn attention to cities like Perth and Brisbane which are offering much tighter rental markets as well as greater affordability,” Ms Wakeman concluded.