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Perth’s property market seemed to be under a fear-of-missing-out (FOMO) trend, particularly among investors, resulting in heightened competition.
Resolve Property Solutions buyer’s agent Peter Gavalas said Perth’s property market is a “sweet spot” for many buyers and investors due to its affordability, high yields, and robust growth prospects.
“Perth stands out as the only capital city where dwelling values have returned to record highs after the recent downturn,” he said.
Despite this growth, Perth remains one of the most affordable cities in Australia with a median value of $580,000 in May, according to CoreLogic.
“That level of affordability coupled with the strength of the underlying state economy is attracting investors looking for both yield and growth,” Mr Gavalas said.
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Investors attracted to Perth’s rental market
First-home buyers looking to enter the Perth property market might find themselves in a stiff competition with investors, who are gravitating towards the city due to its strong rental market.
In fact, Perth’s vacancy rates were at 0.6% in May, resulting in an annual growth of 18.9% in asking rents.
Meanwhile, rental yields in Perth are among the highest in the country at 4.9% in May.
According to Real Estate Institute of Western Australia (REIWA), first-home buyers and investors are also competing for a limited number of properties available for sale — by the end of May, stock levels in Perth fell to a 13-year low.
Homes only take a median time of 12 days before they get sold, the fastest record REIWA witnessed since 1998.
“We have very high demand and very little supply, so some investors are feeling the pressure to act quickly — but investors need to be mindful of the heightened competition and not succumb to FOMO,” he said.
“As that can lead to overpaying and, ultimately, jeopardising their short-term gains.”
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