Time for investors
It could be a good time for investors, writes Esther Nilson. Photo – Canva.
  • Investors have mainly fled the market over the past few years, with low yields
  • With the year-long rental moratorium now over, rent prices rising, yields are improving
  • With prices in Perth taking off, but still relatively cheap, it could be a good time for investors

With the year-long rental eviction moratorium bandaid ripped off on 28 March 2021, the sting of the housing shortage in Perth will linger for quite some time for many tenants and prohibit many first-time renters from entering the market.

Many tenants are moving back in with parents or into a shared housing arrangement so they have a roof over their head that isn’t their car. A vacancy rate of less than 1% in Perth has created a housing crisis.

REIWA President Damian Collins has been advocating for some time that the government provide incentives for investors to return to the market.

For any Eastern States investors in a position to build or add to their investment portfolio, now could be a good time to enter the Perth property market. While prices are on the rise, the median price is still below the rest of the country and potential return on investment could increase significantly in coming years.

It is important to note that rental values have yet not returned to where they were back in 2013 in WA.

Rental yields are likely to be greater with cheaper purchases in the demographic 15km and beyond from the CBD and these high demand properties are achieving rents with a median average of $350 per week for a 3×1 property, and rising.

For example, in Perth’s south-eastern suburb of Armadale, there are currently 22% fewer properties in the suburb available than this time last year (Source: Pricefinder).

A 3×1 could achieve:

  • approximate sale value – $315,000
  • approximate rent – $330 per week
  • gross rental yield – 5.4%

Apart from an investment portfolio growth, investors can also achieve personal satisfaction in the knowledge they are providing a community service by increasing available properties for those in need.

Yes, there are bad tenants who have been evicted for doing the wrong thing, but there are also many good tenants who have been forced out of the house they have made their home in more ways than one.

These are the tenants that property managers yearn for, when they are forced to decline their application over another good tenant.

Tick, Tock … now may be the time to invest in the Perth rental market.

~~

Before investing in any asset, please do your own independent research, taking into account your own personal financial situation. This article does not purport to provide financial advice. See our Terms of Use.




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