07/04/2021 - 13:00

Investors choose Perth

07/04/2021 - 13:00

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Australian investors have voted Perth as the best capital city market to purchase property, according to Momentum Wealth’s annual survey.

Investors choose Perth
Investor preference in Perth’s property market was up 11 per cent on 2020. Photo: David Henry

Australian investors have voted Perth as the best capital city market to purchase property, according to Momentum Wealth’s annual survey.

The property investment consultancy received 467 responses from property investors across Australia, with 48 per cent of respondents selecting Perth as their preferred investment location over the next 12 months.

That represented an 11 per cent uplift in investor confidence in the Perth market compared with last year’s survey.

Momentum Wealth general manager Jennifer Wakeman said the positive sentiment towards Perth was driven by a number of factors.

“Perth’s market has well and truly entered a recovery phase and has recorded six consecutive months of price growth, which is attracting the attention of investors,” she said.

“An influx of returning expats, job vacancies attracting relocations from interstate, and strong owner-occupier activity, has put further downwards pressure on sales and rental stock, which were already low, leading to positive price movement across the board.” 

Ms Wakeman said the rising positive sentiment towards Perth was also backed by WA’s strong economic performance.

“Western Australia has seen a resurgence in mining activity which, coupled with the state’s effective response to the COVID-19 pandemic, has helped buoy the economy and provided a boost to investor confidence,” she said.

After Perth, Queensland was voted as the next place to purchase an investment property (representing 24 per cent of responses), followed by Melbourne (10 per cent – falling from 17 per cent the previous year).

Momentum said the shift in sentiment away from Melbourne was a likely reflection of the challenges the city had faced in relation to border restrictions.

Both Sydney and Melbourne have experienced a softening of their rental markets.

“The Sydney and Melbourne markets have recently benefitted from high levels of overseas migration, however, this exposed them to greater downside risk when international borders closed, leaving them more vulnerable to an influx in supply compared to markets like Perth where these levels of demand have been much lower,” Ms Wakeman said.

“Despite the weakened inner-city markets, both Sydney and Melbourne have weathered the impacts of the pandemic better than many experts predicted, largely as a result of increased owner occupier activity, especially at the top end of the market.

“However, investors remain largely absent from these two markets as they turn attention to cities like Perth and Brisbane which are offering much tighter rental markets as well as greater affordability.”

Meanwhile, in Perth and Brisbane, investor positivity towards the home sector is at its highest.

Ms Wakeman said that forecast growth and population resilience were helping to boost local opinion in the Brisbane market, while price growth in the local market is helping lift confidence among Perth-based property investors.

“Economists have been forecasting growth in the Brisbane market for several years now and Queensland locals remain confident in these predictions, especially given the low levels of both sales and rental stock,” Ms Wakeman said.  

“After several years of downturn, WA investors are now seeing sustained growth, and confidence in the long-term prospects of the market is reflected in the high number of local investors who view Perth as the best place to invest.”

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