Every property investment success starts with data-driven and up-to-date property market insights.
A property investment journey can be daunting and challenging at first. So you need to know where to invest in a rental property and which areas with the best selling price give you guaranteed peace of mind when it comes to property purchase. It’s crucial to consider property investment factors that may affect your property investments.
That is why you need the latest insider view on the Perth property market to make your property management much easier!
Property Market Update 2022
As pandemic pushed people out of their limits and with surging house prices, Perth remained firmly in place for good property investment.
Although gross rental yields fell to a new record low across Australia, reaching 3.2% in December. For the past few months, every capital city has been recording low yields; the lowest yields remain in Sydney (2.4%) and Melbourne (2.7%); however, the Perth property market remained stable.
Perth property prices increased by 13% in 2021, and it is expected to jump another 10% in 2022 as Western Australia’s border is reopening.
Perth Property Investment – Sales and Rental
As property prices increased in the Perth market, the national housing values recorded an annual rise of 22.1% compared with a 9.4% rise in rents. The rental yields decreased as a natural consequence with an overall downward trend last year, but the number for rent has more or less started to flatten.
More tenants wanted to get out of high price, expensive house renting and wanted to own houses in an established suburb around town. If you are looking for property investments, no doubt there are opportunities in most property markets around Western Australia.
There are property sales services in Perth that can ensure you get the best selling price, while they handle all the stress for you. They can give you Perth property insider tips and help you find property investment in family-friendly areas with good locations, schools, and amenities.
Will Perth House Prices drop?
Across Australia, thousands of first-time homebuyers, as well as tenants, are wondering if house prices will ever drop.
However, it is known that With Western Australia’s border reopening, property prices are expected to rise again in 2022 (not a piece of good news for home buyers and tenants).
House prices in Perth will probably drop only if the interest rates go up. Some property investment analysts are betting that the interest rate will rise in 2023. That would be good news for home buyers and renters as housing value can drop. However, some investment property analysts warn that if the new COVID variant worsens, they fear that house prices could rise in the double digits again next year.
Common Factors Affecting Property Markets
Tenants and first-time homebuyers always consider the location of property investment. For the past few years, properties in the capital city have been highly sought-after locations. However, a lot changed during the pandemic. Many people are leaving cities in favor of more suburban spaces.
The following are some of the location factors that can drive up property prices:
- Property neighbourhood
- Property amenities like restaurants, schools, playgrounds and attractions
- Proximity to public transportation, shops, stores and malls
2. Interest Rates
The interest rates impact the price and demand of real estate investment. A property with lower rates brings in more buyers. However, it also expands the market for real estate, driving up property prices.
Another factor affecting interest rates is the Federal Reserve System (FED). If FED raises the federal funds rate and mortgage lenders, the property investment process will increase.
3. Investor Lending by State
Property investment prices follow the cycles of the economy. However, investors can mitigate this risk by buying Real Estate Investment Trusts (REITs), affecting real estate prices.
4. Policy Changes
Government policies and legislation, including tax incentives, deductions, and subsidies, can boost or hinder demand for real estate.
Tips to Survive and Thrive When Purchasing Property
Even if you got the latest insider view on the Perth property market, the property investment journey could still be daunting. It’s so easy to be discouraged. However, having a mindset of resiliency will help you win and survive.
Here are some helpful tips to avoid all the stress that comes with property purchases.
- Map out all your goals, create a robust business plan, and take care of all the stuff on your real estate “to-do list”.
- As the property market moves in a cycle, make sure to maximise all your properties’ returns while you still can. Don’t let adversity knock you down, but face it head-on.
- Upgrade your home today or buy an investment property in well-located areas as they are likely to be affected by the economic crisis.
- Make sure to revisit your interest rates and see what you’ve got ahead for you with the increases in rental properties. Try to hang on as the upside in the next two to three years will be great for house price growth.