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A state-by-state guide to property investment in Australia: WA, SA, Tas (Part 2)
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A state-by-state guide to property investment in Australia: WA, SA, Tas (Part 2)

A state-by-state guide to property investment in Australia: WA, SA, Tas (Part 2)

by Bianca Dabu | November 27, 2018 | 1 minute read

Get to know the investment opportunities across the states and territories of Australia—New South Wales, Victoria, Queensland, Western Australia, South Australia, Australian Capital Territory, Northern Territory and Tasmania.

Map with location pins
November 27, 2018

Western Australia

Population: 2,591,900 (March 2018)
Median price (Perth): $544,609 for houses; $347,089 for units (September 2018)

Western Australia stands as the country’s largest state and the second-largest country subdivision in the world, occupying the entire western third of Australia and serving as home to approximately 11 per cent of the nation’s total population. Most of the population is concentrated in its southwest corner.

The state’s economy is largely driven by the mining industry and natural resources, including the extraction and processing of a diverse range of mineral and petroleum commodities. The state contributes around 58 per cent of Australia’s mineral and energy exports, allowing the gross state product per person to sit at over $102,000, significantly higher than most states.

Following the end of the mining boom, the state government works hard to diversify the economy, making it less reliant on major export markets. Over the past 15 years, tourism, finance, insurance, property services and construction have emerged as growing industries across the state.

While the Perth property market has been on a downward trajectory since June 2014, experts believe that the state capital has been showing signs of recovery as of late.

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The Domain House Price Report found that, as of September 2018, all capital cities are now underperforming relative to last year, except Perth and Adelaide.

More than 50 suburbs in the WA capital have been completely bucking the downward trend with positive growth, including Swan View, East Cannington, ComoComo, NSW Como, WA, Hillarys and Cottesloe for houses and MaylandsMaylands, SA Maylands, WA, Midland, Tuart Hill, Fremantle and ClaremontClaremont, TAS Claremont, WA for units.

According to Real Estate Institute of Western Australia (REIWA) president Damian Collins: “While the worst of the market downturn appears to be behind us, the results of the September 2018 quarter reveal conditions that are favourable for buyers and investors. It’s not necessarily a strong market, but it’s certainly not as bad as the media has been portraying it to be.”

“We’ve seen an increase in activity between the $350,000 and $500,000 price range, which is pleasing as it indicates first home buyers remain an active component of the Perth market.”

“Slowly but surely we are moving towards parity in the Perth rental market, with improved conditions across the board meaning there is a good opportunity for tenants and landlords to benefit simultaneously.”

Currently, the median house price in Perth currently sits at $544,609, while the median unit price is at $347,089.

 

Top performing suburbs in Western Australia *based on annual median growth

Median price  Annual median growth Gross rental yield
Norseman $47,500 35.71% N/A
Casuarina $1,000,000 34.22% N/A
Nickol $365,000 32.72% 5.98%
Boddington $260,000 30.00% 5.85%
Pemberton $327,500 27.18% 5.23%

 

South Australia

Population: 1,733,500 (March 2018)
Median price (Adelaide): $535,527 for houses; $316,163 for units (September 2018)

South Australia is the fourth-largest state in the country, ranking as the state with the fifth-highest population. About 75 per cent of its population resides in Adelaide, the state capital, or its surrounding suburbs.

The Health care and social assistance sector stands as the highest employment sector in the state, followed by retail trade. The manufacturing sector, which was the largest employer since 2006-07, continues to play an important role in the local economy as it generates over 11 per cent of the state’s gross state product and supports the exportation industry.

State exports, as well as the production of South Australian food and drink, contributes approximately $10 billion each per year the nation’s economy.

Adelaide boasts a strong reputation as Australia’s arts capital, featuring a wide variety of festivals, galleries and theatres, as well as a vibrant live music scene, a multitude of design and fashion exhibitions and stunning architecture.

Unlike most capital cities, Adelaide maintains a relatively quiet and laid-back lifestyle, attracting families to its suburbs. The central business district, meanwhile, makes room for young students and professionals who thrive in the urban jungle. Due to affordability, Adelaide also presents good opportunities for first-time buyers who seek to enter the real estate market.

As of 2018, the Adelaide property market remains flat, with property prices up by only 0.6 per cent over the past year. However, houses have been selling quicker, making Adelaide the only capital city to record a higher number of property sales compared to a year ago.

According to Century21’s Charles Tarbey: “It's been one of those states where the movement in price has been steady all the way through. You just have to make sure you allow for a little bit of extra cash just in case you do get a vacancy or if there's a closure of another industry … [because] South Australia seems to get belted with that.”

Once the capital city finds a sustainable solution to unemployment rates and poor employment growth, experts believe that it could catch up to positive-growth capital city markets moving forward.

 

Top performing suburbs in South Australia *based on annual median growth

Median price  Annual median growth Gross rental yield
Two Wells $425,000 49.12% N/A
Wayville $1,217,500 47.12% 2.96%
Henley Beach $647,500 44.69% 2.56%
Morphetville $451,500 44.48% 3.80%
Unley Park $2,132,500 42.22% 1.68%

 

Tasmania

Population: 526,700 (March 2018)
Median price (Hobart): $478,491 for houses; $352,111 for units (September 2018)

The island state of Tasmania encompasses the main island of Tasmania, the 26th largest island in the world, and its over 330 surrounding islands. Most of its population resides in Hobart, the state capital and largest city.

Hobart is notable for the restored colonial building lining its streets, as well as a good mix of city style-living and country lifestyle that attracts visitors and new residents from a wide range of background. While most of the residents in the urban city are involved in administration or office work, a significant part of the city’s population are artists, sculptors, painters, writers, artisans and tourism operators.

Formerly favoured by an older demographic, Hobart have recently welcomed tree changers and university students, all of whom benefit from the city’s wide range of housing options, including townhouses, converted cottages, grand old homes and renovated dwellings.

Like most states, tourism has also risen as one of the fastest growing industries in Tasmania, supported by cheaper air fares and Spirit of Tasmania ferries.

Over the last two years, Hobart has been widely recognised as the strongest capital city property market as Tasmania emerged as one of the biggest economies in the country following the conclusion of the global financial crisis ten years ago.

While some people argue that the time is up for Hobart, experts believe that the capital city is still among the best investment locations in Australia because of continuous economic development, good leadership and diverse demographics.

Propertyology’s Simon Pressley said: “It will come to an end at some point, but still, we can't see that yet. The broader Tasmanian economy, I would suggest is the single biggest success story in Australia since the onset of the global financial crisis 10 years ago.”

“That state was in recession, it was on its knees for a good four or five years. Now, its economy is as good as New South Wales and Victoria. I don't think the nation's done enough to pat Tassie on the back for the wonderful job it's done."

Investors are advised to ease up on the buying and, instead, continue holding their properties for the long term to maximise their earning potential in the hot market.

“Some other states that have been quite underwhelming could learn a lot from tapping into the Tasmanian government and saying ‘What did you do?’ because it's worked,” Mr Pressley highlighted.

 

Top performing suburbs in Tasmania *based on annual median growth

Median price  Annual median growth Gross rental yield
Rose BayRose Bay, NSW Rose Bay, TAS $735,000 43.83% 3.51%
South Hobart $480,000 42.96% 4.11%
Sisters Beach $335,000 42.55% 3.88%
RichmondRichmond, SA Richmond, VIC Richmond, NSW Richmond, TAS Richmond, NSW $580,000 40.60% 3.67%
Clarence Point $402,500 40.12% N/A

 

Check out the first installment of A state-by-state guide to property investment in Australia to know more about investing in the states of New South Wales, Victoria and Queensland.

The information has been sourced from realestate.com.au, CoreLogic, Canstar and the Smart Property Investment website.

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