Perth hot spot prediction becoming a reality
By Paul Bennion, Managing Director, DEPPRO
During the middle of 2018, I predicted that Perth would become a property hot spot during the following two years.
I am happy to report that there are growing signs that prediction is becoming a reality.
The latest figures produced by the Real Estate Institute of Western Australia shows that the median house price in Perth jumped by 5.2% up to $510,000 during the December 2018 quarter.
At the same time, the number of rental properties in Perth fell by 6% to 6,865 during the same period and is 27% lower than 12 months ago.
The vacancy rate in Perth is now 2.9%. Historically, when the vacancy rate falls below 3%, rents start to rise.
Confidence is building again in the Perth property market due to improving economic conditions in the State which will boost employment creation.
For example, more than $25 billion will be invested by the large mining companies in new iron ore mines in the State over the next few years.
At the same time, there has been very low levels of new housing construction in the State over the past two years. This means that there will be a shortage of homes in the city if the local economy gains further traction.
Some leading property commentators are predicting a rental crisis in Perth over the next 18 months due to lack of supply and rising demand for homes by tenants.
DEPPRO has been operating in Perth for nearly two decades and over the time has produced thousands of tax deprecation reports for investors who have purchased investment properties in the city.
During that time, our company has experienced the different cycles of the Perth property market including the effects of the recent mining boom in Western Australia and subsequent downturn.
I am now confident that 2019 and 2020 will see a major upswing in the Perth property market.
DEPPRO is also already recording increased activity by investors in the Perth property market during recent months as they buy into the bottom of the property market with the strong potential of reaping financial rewards during the coming years.
We expect that activity by investors to increase during 2019 with increasing activity from eastern states property investors.
The major housing markets in Melbourne and Sydney are now cooling off and this trend will encourage more investors to seek out affordable capital city property markets like Perth that are primed for growth in the near future.