Perth buyers warned against FOMO-driven decision making
While the West Australian capital is an increasingly attractive market for investors looking for an affordable market entry point, one buyer’s agent has offered a stern warning.
Peter Gavalas, a buyer’s agent from Resolve Property Solutions, has acknowledged that while Perth’s property market is an investment “sweet spot” — its relative affordability needs to be taken with a grain of salt.
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He believes there’s a real need for caution “in such a fiercely competitive environment”.
“We have very high demand and very little supply, so some investors are feeling the pressure to act quickly,” Mr Gavalas said.
“Investors need to be mindful of the heightened competition and not succumb to FOMO [fear of missing out] — as that can lead to overpaying.”
He explained that, ultimately, that could jeopardise an individual’s ability to make short-term gains.
Mr Gavalas’ words of advice come as low stock levels pose a “significant challenge” for investors. According to the Real Estate Institute of Western Australia, the number of properties available for sale in Perth fell to a 13-year low at the end of May.
Such a scarcity of listings means homes are now selling in just 12 days, on average.
That’s the fastest median time on market since record-keeping began back in 1998.
Smart Property Investment recently looked at the question: Why are Perth houses selling like hotcakes?
At the same time, SQM Research said the city has a vacancy rate of just 0.6 per cent (as of May 2023), with rents soaring as a result.
In the week ending 12 June 2023, annual growth in rents reached 18.9 per cent.
It’s a boon for investors “looking for both yield and growth”, Mr Gavalas flagged. It’s no surprise then that a number of Perth suburbs were recently named in Smart Property Investment’s Fast 50 2024.
One such suburb was Camillo, which holds the accolade as the suburb that has sold the “cheapest” property in the city of Perth so far in 2023.
Another suburb to make the list was Wellard, which touts a median price of $441,000 — but is delivering investors median rents of $480.
“Perth stands out as the only capital city where dwelling values have returned to record highs after the recent downturn. Despite this, Perth remains one of the most affordable cities in Australia, with a median value of $580,000 in May, according to CoreLogic,” Mr Gavalas concluded.
