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Property owners in Perth are taking advantage of the rising market to jump start their investment portfolios.
This was revealed by property advisory firm Momentum Wealth, which has cited CoreLogic’s revised home market annual price growth of 18.1 per cent in early October as evidence for the sizzling hot market in Western Australia’s capital city.
According to Caylum Merrick, finance team leader at Momentum Wealth, a growing number of Perth property owners are capitalising on the strong market conditions.
“With Perth property values recording sustained growth over the past 12 months, many owners have benefitted from an uplift in equity in their property and are seeing this as an opportunity to review their financial position,” he said.
The buzz created by the booming market and historically low rates have led an increasing number of new and existing investors wanting to use their equity to fund an investment or to consolidate their position, Momentum Wealth has noted.
In fact, investor loans in Western Australia climbed by 86.35 per cent in August 2021 compared to the previous year, according to data from the Australian Bureau of Statistics.
“We have also witnessed similar growth in investor demand, with many investors recognising the unique opportunity at hand to capture both growth conditions and strong rental yields, with Perth continuing to offer some of the most competitive rental yields across the nation,” Mr Merrick noted.
Swinging into gear
It appears that this upward trend is an indicator that the market is swinging into gear and will continue to do so based on figures from the Real Estate Institute of Western Australia (REIWA).
In October 2021, REIWA reported that an average of 970 properties were sold per week while the number of listings declined. The number of property listings has nearly halved since peaking at 16,969 in November 2015.
“There’s no sign the current growth phase has run its course, with increased mining activity, widespread skills shortages and ongoing low levels of stock all favouring market growth,” he said.
In addition, the finance team leader said investors who jump on the growth opportunity presented by Perth’s predicted market growth would be able to leverage further advances as border restrictions ease and mobility increases.
“Investors who act now are likely to be in a stronger position to capture further increases in demand that will come with the easing of border restrictions,” Mr Merrick opined.
However, he did advise investors to be prudent, warning them that property investing is not a one-size-fits-all strategy. It’s critical to have the proper strategy and right financing structure in place.
Real estate is a type of real property that refers to any land and its permanent improvement or structures that come with it, whether natural or man-made.