Interstate home buyers are increasingly becoming interested in what Western Australia has to offer, with Perth becoming the fastest-growing major market over the past month, according to Momentum Wealth.
The latest data from the group showed that by the end of 2020, the Western Australian housing market has reported a 164% increase in interstate enquiry.
Emma Everett, buyer's agency team leader at Momentum Wealth, said the sudden spike in interest in the state's housing market was due to investors and buyers looking to relocate to Perth following the COVID-19 pandemic.
"For investors who have benefited from recent upswings in their own market, there’s certainly a great opportunity to leverage the state’s affordability and enter the Perth market to take advantage of its respective growth cycle, and I think many investors are now recognising this could be a time-limited opportunity," she said.
One of the major factors why Perth is regaining interest from investors is its tightening rental market conditions, which reflect stronger outlook for yields.
"While we are beginning to see sustained growth in property prices, WA is currently one of the most affordable states to buy across Australia, which, combined with a significant tightening of rental stock and initial rent increases, has had a positive impact on rental yields," Everett said.
In fact, estimates from Momentum Wealth show that houses in Perth with robust underlying land value have achieved yields ranging from 4.8% to 5.5%.
However, Everett noted that while conditions are improving overall in Western Australia, some parts of the state do not have an outlook that is as bright as others.
"Likewise, we have seen that performance can also vary quite significantly depending on property type, so our advice to investors is to buy selectively, and if you aren’t familiar with the local market, engage someone who can offer that local expertise to guide you in making the right investment decision,” she said.