The end of 2020 has seen a rental property crisis unfold in Perth that presents a significant opportunity to secure one of a limited reserve of new development investment apartments in Perth.
When considering this opportunity, there is a perfect financial storm for investors to take advantage of the RBA’s low cash rate (0.1%), historically low interest rates and Perth’s record low vacancy rate. It has arguably never been cheaper to borrow money, but it is the pandemic-impacted Perth rental vacancy rate, nearing levels not experienced in nearly 40 years, that is having the most impact on market demand.
Why Perth Is A Prime Investment Opportunity
The current vacancy rate now sits at 0.96% - its lowest in 13 years and the first time it's dropped below 1% in 40 years. Furthermore, Western Australian homeowners and investors more broadly, are thrilled to learn that housing values across Perth are tipped to increase by between 8 and 12% next year.
With the low level of supply and high level of demand in Perth's rental market, it is predicted that rents will rise by 20% or more. This has been shaped by a number of factors including; the government’s moratorium on rent increases and evictions, the WA resource-strong economy doing well, and the relative lack of investment in the years prior to the pandemic.
Where this market recovery differs from similar historical periods that have preceded a market boom, is the reluctance of investors, an insecurity that is believed to be directly attributed to the pandemic.
This highlights the opportunity for securing a Perth investment property prior to what is potentially a significant market increase. Whilst REIWA has predicted a modest rise of about 5%, both SQM Research and ANZ are predicting up to a 12% surge in property prices across Perth – the most significant across Australian capital cities.
How To Invest Off-The-Plan Successfully In Perth
At present, there are stimulating government grants available for investors to take advantage of, some of which will only be available until the 31st December 2020. These grants can be secured with a deposit on your rent-ready investment apartment for which construction has already begun.
When buying off the plan, its all about timing. Combined with beating the market increase, your investment is primed for maximum returns in 2021 and beyond, particularly when entering the rental fold with a premium commanding rent return.
When researching different types of property investments, it’s worth considering the applicable tax deductions. Apartments provide higher yield potential than home and land, given that the land component of the price is not tax deductible.
These government grants remain available until the end of December 2020, and only require a deposit to be able to secure.
You May Have Seen This Mentioned In:
The Housing Boom and Bust Report 2021 - Perth property prices are tipped to rise next year because of government stimulus, record low rates and changes to lending laws. This is the highest predicted increase across all Australian capital cities.
WA's coronavirus residential rent laws extended until March to stop increases and some evictions - The McGowan Government's moratorium has been extended to March 28 next year to help "preserve stability and certainty in the rental market" and REIWA president Damian Collins says the move will only worsen the rental shortage.
Perth property market booms off the back of COVID-19 crisis - Pent-up buyer demand, low interest rates and an extraordinarily tight rental market have helped fuel a mini-boom within the Perth property market. “…we have had a decline over the past five and a half years… making us the cheapest capital city in the country,” Harcourts chief executive Paul Blakeley said.
Where To Buy
Only 15km from Perth CBD and 5km from Fremantle, Mosman Park is nestled between the scenic Swan River and beautiful West Coast beaches. The well-established suburb offers the perfect blend of nature and urban living and is most attractive to couples and singles under 35, as well as older couples and single occupants aged 35-54. Mosman Park has convenient infrastructure running direct to Perth City and Fremantle and multiple educational instructions in proximity - a suburb for which a modern apartment would be highly desirable.
Investment Apartments in Mosman Park
With over 60% of apartments sold, construction has now begun on the Fairlight apartments – offering an ideal opportunity to secure your desirable, yet affordable, investment property in the highly sought-after suburb of Mosman Park from just $469,000.
An easy to maintain and modern design means low maintenance costs, and being positioned as a rental apartment that can command a premium rent level for the area.
With Perth’s current rental vacancy rate set to continue until at least the end of March, and with ongoing government assistance, investors are especially poised to jump into this market. The demand for investment apartments already under construction is clear.
A development that is backed by specialists in construction, engineering, and architectural design, Fairlight apartments is a secure investment decision at a time that is primed for maximum returns.