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The CEO of a real estate group has predicted a rise of external property investors into the Perth property market.
Shane Kempton, CEO of Professional Real Estate Group, said investors may enter into the market due to slow price growth rates.
“In particular, Perth should see an influx of investors from Sydney and Melbourne where price growth rates for property are beginning to slow due to moves by APRA to tighten lending for investor housing in these overheated markets,” Mr Kempton said.
“Foreign investors who have been active in both Sydney market should begin to focus on Perth following moves by the NSW state government to double the Foreign Investor Surcharge Duty from 4 per cent to 8 per cent, while annual land tax surcharge on foreign buyers will rise from 0.75 per cent to 2 per cent a year.
“House prices in Perth are already nearly half of that in Sydney, so an investor in Perth can effectively buy two houses for every one in Sydney.”
Looking at the 2017-18 financial year overall, Mr Kempton predicts positivity due to a slowdown in new home construction which could lead to pressure on rental and property values after the Western Australia economy picks up.
“Anyone who is not familiar with the Perth property market should focus on key lifestyle locations in the city. Properties close to the CBD, river or ocean. Historically, these locations have gained above average capital growth over the long term,” Mr Kempton said.
“For example, astute property investors have now a wide choice of properties to choose from in Perth within a 20-kilometre radius of the Perth CBD for $500,000 or less. These properties will be the first to rebound in value during the coming financial year.”
He added that external property investors need to take their time to choose an investment property and to focus on suburbs with median house prices around $500,000 or below.