Perth Property Forecast 2020
Perth property forecast 2020…
2019 brought some welcome relief for Perth landlords, with a surge in interest and applications on properties, faster leasing times, and finally some small rent increases for certain suburbs.
So how’s the Perth real estate market expected to fare in 2020? Read the Perth property forecast 2020 below…
Key takeaways from 2019:
- Rental supply is being absorbed by demand. The December vacancy rate sat at a stable 2.3 per cent, down from its peak of 5.5 per cent in 2016.
- Our We Love Rentals vacancy rate is currently sitting at 3 per cent, down from 6.25 per cent in 2018.
- Online job advertising is slowly trending up, with WA and the ACT recording the only annual rises in 2019; 0.6 per cent (WA) and 9.4 per cent (ACT) respectively.
What will 2020 mean for existing landlords?
- Rental yields are tipped to rise between 5% – 10% in 2020.
- Population growth is forecast to be 1.5% in 2020.
- WA has recorded the greatest increase in interstate migration since 2015 from NSW, Victoria and the Northern Territory.
Rental yields are tipped to rise between 5%-10% in 2020…
Rental demand is predicted to increase in line with population and employment growth, along with an under supply of new housing. This should create more competition in the market between tenants and push rents up.
Population growth is forecast to be 1.5% in 2020…
This is up from 0.9% in 2018. According to the ABS and the Department of Treasury, Perth’s population growth bottomed out in 2016 and has been steadily increasing since.
An increase in interstate migration…
WA has recorded the greatest increase in interstate migration since 2015 from NSW, Victoria and the Northern Territory.
Perth is an appealing city of choice to interstate first home buyers and young professionals because it’s much more affordable to break into the real estate market.
This is because comparatively, Perth has the lowest median house price and is the cheapest city to rent in, with affordable inner city living options, a shorter commute time (to the CBD), and lots of new small bars and dining options.
The percentage of residents moving away has also slowed to its smallest levels since June 2016.
What will 2020 mean for investors?
- Perth property beats Sydney on rental yields, by 1% for apartments, and 0.8% for houses.
- Perth properties can be found that are cash flow positive.
Better rental yields than over east…
Perth property beats Sydney on rental yields, by 1 per cent for apartments, and 0.8 per cent for houses. This may not sound like a big difference, so to put things in perspective, say you bought a house in Sydney for $500,000 and one in Perth for the same price. With the average Sydney rental yield of 2.7%, you would get $13,500 a year in rental income.
But with Perth’s rental yield of 3.5%, you would get $17,500 a year in rental income – which is about $76 per week more than Sydney.
Cash flow positive Perth properties…
Because home lending rates are at record lows, Perth properties can be found that are cash positive.
This means the rent you could achieve from an investment property is able to cover all your expenses (mortgage repayments, property management fees, landlord insurance, council rates etc).
This is a very unique state for the market to be in, and first home buyers in particular are in a great position to set themselves up for the future.
Ready to rent your home out in 2020? Book an appointment with Sarah Leahy here to find out how much your property could achieve for you, or give us a call on 6254 6300. We’d love to answer any questions you have about the property management process.
Brendan Leahy
I am the licensee of We Love Rentals and provide support to the team whenever needed. I began my real estate career over two decades years ago. While I loved seeing people achieve their dream of a new home for their family, I kept thinking that there had to be a better way of doing real estate – one with respect for the long term benefit of the client and one that focuses on customer satisfaction.
