The Perth market is like a simmering pot.
Bubbling along with a steady flame underneath.
It should have burnt out long ago but our market continues to pop and bubble, full of life and heat.
Most recently the investors have come back, adding even more fuel to the fire. ‘Mums and Dads’, with cheap borrowed money leveraged against equity, recently acquired in their own homes, enjoying high rent returns and the prospect of capital gains.
This phenomena is not so amazing in itself. We are a nation of property investors, incentivised and supported by a government that is keen to have private money working hard to provide social housing.
What is so amazing is these Mum and Dad investors have been absent from the Perth market for the best part of 6 years. Away in the wilderness like some forgotten people, but now now they are back!
What does this mean?
Well, bits of the market that have stubbornly resisted the stunning Perth market uptick over the last year and a half are finally coming along for the ride, experiencing some upward price movement.
The older style townhouse and villa homes that languished with falling rents, then COVID rental moratoriums and jaded landlords hanging on desperately for some positive market movement are now flavour of the month.
In a rising market these properties for investors are entry level to a postcode and often provide great rental yield. Equally owner occupier buyers feeling like they are being priced out of an area, fall back on these ‘less-sexy’ homes in an attempt to stay local.
There really is only one market segment left to have its run – apartments. Particularly older style apartments.
Is this the last obvious opportunity to get in as a buyer, before even this bit of the market starts to rise?
With a chronic shortage of housing supply in both the rental and sales markets an apartment purchase just could be a good bet…
Derek Baston.
