Australian investors have voted Perth the best capital city market to purchase property, according to property investment consultancy Momentum Wealth’s annual survey.
Of 467 responses from property investors across Australia, 48 per cent of respondents selected Perth as their preferred investment location over the next 12 months – an 11 per cent uplift in investor confidence in the Perth market compared with last year’s survey.
This comes on the back of information released by REIWA last week that showed properties in Perth were selling the quickest they had in 15 years.
CoreLogic data shows houses continue to outperform apartments, with the average Australian capital city house price last month reaching $747,639, while the average unit price was $592,154.
Across the combined capitals, the quarterly growth rate for houses was 6.5 per cent – more than double that of units at 3.1 per cent – representing good buying value for those considering purchasing a unit or apartment regardless of where you live.
In more good news for those looking to buy an apartment, separate data from CoreLogic found the proportion of properties in the December quarter that changed hands at a profit rose to 89.9 per cent, above pre-pandemic levels, while unit owners were more likely to sell at a loss than house vendors.
REA Economist Anne Flaherty last week outlined a few reasons for this.
“Units are typically closer to CBDs and universities,” she said. “The drop in international students and a reduction in the number of people commuting into CBD offices has subsequently led to a decrease in demand from renters. These areas have therefore seen vacancies rise and rents fall and made owning apartments comparatively more risky.”
However, CoreLogic Research Director Tim Lawless said even in the east, the apartment market was now looking up.
“Despite the underperformance, unit markets have turned a corner, with Sydney recording two consecutive months of rising values, while the Melbourne unit market has seen values consistently rising since October last year, with the trend accelerating over recent months,” he said.
Commonwealth Bank Senior Economist Belinda Allen in February forecast a five per cent rise for apartments.
The upswing in the apartment market continues to be buoyed by Perth’s shrinking rental vacancy rate, which has dipped to record lows in recent months.
During the past 12 months, unit rents rose a staggering 10.4 per cent while Perth house rents also saw a double-digit growth of 12.1 per cent with no signs of slowing down any time soon.
According to WA’s highest selling apartment project marketing agent for 2019/20, Nick Shinner, the last 40 years have shown that apartments appreciate at the same rate as houses, with a well-located apartment showing stronger growth than a badly located house and attracting a higher rental yield.
The booming property market across the country continues to gather momentum, with the current housing boom only helping fuel an increase in the popularity of apartment living, with more and more people considering apartment living as a longer-term, more affordable housing option.
Particularly amongst millennials, the Aussie dream of a traditional move to the suburbs and a detached house is increasingly being replaced by a city unit with parking below or access to a communal electric car or bike fleet.
Source: The West Australian