Looking outside the metropolitan box
Property investors ignoring Perth’s outer-suburb apartments might be missing out, as urban sprawl is making fringe developments increasingly attractive prospects.
While investors have traditionally looked to inner-metropolitan complexes for their promising rental yields, Kim Bevan Real Estate Principal and Licensee Kim Bevan said people were now being drawn from Perth into suburbs like Joondalup, which were offering low-maintenance homes at affordable prices.
While the popularity of Perth-centric living has shrunk following COVID-19 lockdowns and renewed desire for space, Mr Bevan said state infrastructure projects were also propelling the exodus to the outer suburbs.
These projects include Metronet, a State Government initiative which involves building railway line extensions and more train stations to better connect greater Perth.
Mr Bevan said buyers and renters were bewitched by the outer-suburban lifestyle, with drawcards such as beautiful beaches, marinas, shopping centre precincts and tertiary institutions.
“A lot of government infrastructure and employment opportunities are now located away from the Perth CBD,” he said.
“For example, look at Joondalup and the expanding Lakeside Joondalup Shopping City, Joondalup Health Campus and all the various government agencies and tertiary institutions.
“It’s a sign of continuing urban spread.
“Many complexes are within walking distance to train stations and therefore facilitate easy access to the Perth CBD without making people put up with the traffic chaos of peak-hour Mitchell Freeway.”
Though home values have been rising in the last handful of months, Nu Wealth Strategic Property Advisor Craig Gemmil said Perth’s apartment market offered investors something to think about.
“With the glut of apartments on the market over the past few years, developers were left with the choice of selling at a discount or renting them, and typically most developers have leased these properties to maintain cashflow,” he said.
“For astute property investors, near-new apartments offer a prime investment opportunity, as they are being sold already tenanted and well below their initial asking price when built.”
Despite the positive conditions, Western Australia is still having to cry for investors to take a punt.
Real estate agents have continually reported unprecedented crowds at home opens, flying property values and rising rents, but Perth’s investor cohort still won’t budge.
Nu Wealth Director Daniel McQuillan recently said the state’s potential landlords were suffering from buyer’s fright and missing out on significant windfalls in Perth’s red-hot market.
He said the big challenge was encouraging investors to overcome this mindset and knock some new rentals into the market.
“Research by Nu Wealth shows only 30 per cent of investors make money in the Perth real estate market because they bought before the boom, while the remaining 70 per cent lose money because they adopted the herd mentality and bought at the top of the market,” Mr McQuillan said.
“Until these investors’ buyer’s fright syndrome ends, rents will continue to surge in Perth and the few investors who do decide to buy now will make big profits over the next two years.”
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