More investors expected to enter Perth market

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Investors are seeking to take advantage of the Perth market’s attractive yields as Chinese investors are predicted to make a more prominent role during the city’s post-mining boom era.

Savills State Director of Retail Investments/Services Chris Ireland believes that the Perth market’s improved investment fundamentals will drive renewed interest in Western Australia’s real estate industry.

“As demand for property in the east coast markets drives increasingly low yields and correspondingly high prices, investors will turn to WA, and those who do so first are those who stand to profit most,” said Ireland.

He further argued that investing in the WA real estate market should be considered a long term game.

“Retail, and especially neighbourhood centre retail, is regarded as a defensive investment, the sort of investment that continues to deliver in a downturn and that has been important in the upward sales trend we have seen over the last 12 months,” Ireland added.

“But these investors also have an eye to the future in terms of considering location including local population growth and local and state government infrastructure initiatives, which will deliver long after the downturn ends.”

The next investment wave could see stronger demand from offshore investors, especially the Chinese.

“Chinese overseas direct investment is expected to overtake inbound foreign direct investment in 2016,” said Ireland.

“In other words, there will be more investment dollars moving out of China than moving in. This has the ability to significantly impact investment markets worldwide as the Chinese appetite for investment products increases and WA is going to see its fair share of that market.”

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