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East coast investors and buyers’ agents are flooding Western Australia’s sub-$500,000 property market, attracted by low prices, a historically low vacancy rate, high rental returns and strong capital growth prospects.
Sydney-based mortgage broker Bernadette Christie-David, from Atelier Wealth, said many east coast investors who had previously looked to Queensland were snapping up rental properties in Perth.
This four bedroom, two bathroom home on Gillespie Parkway in Baldivis has just been listed for offers above $449k.Credit:Domain
“We have mum-and-dad investors and also some younger investors whose income doesn’t allow them to buy an investment-grade property in Sydney,” she said.
“Perth properties have an attractive price point, rental demand is high and returns are around 6 or 7 per cent.
“If you had $500,000 to spend on a property in Sydney you’d be going really far out from the CBD for a freestanding house or maybe get a one-bedder in Sydney.
“Even a four-bedroom house two hours from the city would cost over $750,000.”
Christie-David said demand from east coast investors for Perth rentals started to pick up three months ago and showed no signs of slowing.
“East coast investors are confident and see the value in Perth property,” she said.
Strategic Property Group managing director Trent Fleskens said east coast buyers were predominantly mum-and-dad investors who had benefited from passive growth over the last decade in their home states.
“They are hungry to replicate the same strategy in Perth,” he said.
“They see Perth properties as being in the same place as their own market a decade ago and bring the confidence of previous success.”
Fleskens said the average home in Gosnells would sell for $1 million in NSW, yet attract the same amount of rental income.
“Western Australians are being beaten to the punch because we are a naturally cautious market after years of being burnt post-mining boom,” he said.
Recent REIWA data shows more than 500 houses available throughout the metropolitan area for $400,000 or less.
Many of the suburbs are at the outer edge of the metropolitan area, such as Ellenbrook and Baldivis, with Balga, Armadale and Gosnells topping the list with the most houses for sale for $400,000 or under.
It’s an attractive price point for eastern states investors priced out of their own market.
But REIWA chief executive Cath Hart said the data was also encouraging for first home buyers.
“Whilst the biggest issue facing the Perth property market right now is the housing shortage, Perth still has the cheapest median house price out of all the capital cities and the statistics show there are still a range of affordable houses to choose from,” she said.
“The challenge for buyers is that competition is fierce and they must act quickly to secure a property.
“Many of these listings will become under offer in a matter of days, with the median time to sell a house in Perth currently at 15 days.”
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