Property investors might be missing out on growth opportunities by overlooking Perth as their next investment destination.

CoreLogic Australia research director Tim Lawless said mortgage commitments data showed that Western Australia has a lower portion of investment activity despite its capital city having the best investment fundamentals.

“To me, the fundamentals suggest it is a location that presents one of the best investment opportunities around the country; and yet we're not seeing investors very active in that marketplace,” he said.

Reasons why investors should consider investing in Perth

Mr. Lawless identified several reasons why property investors might be neglecting to include Perth in their considerations for their next investment destination.

  • Perth has the highest gross rental yields among the state capitals at 4.9%
  • The city’s vacancy rate was at 0.7%
  • Population growth in Perth is at 2.3%
  • Perth has a lower median price, indicating a more achievable entry point relative to other bigger cities
  • Annual gains in median prices and rents in Perth are higher compared to its bigger city counterparts

Why investors are overlooking Perth

Data from the Australian Bureau of Statistics (ABS) showed that New South Wales received the bulk of interest, with investors accounting for 38% of the value of new mortgage lending across the stated.

Meanwhile, only 28% of new mortgage commitments in Western Australia were from investors.

Overall, the share of property investors actively participating in Australia’s housing market has reverted to its long-term average, accounting for 34% of mortgage demand.

Mr Lawless said investors are exhibiting greater activity in New South Wales, where rental yields are the lowest among all states, and specifically in Sydney, where they are the lowest among all capital cities.

“The buy-in price is significantly higher, and arguably the prospects for capital gains could be less significant when you consider the affordability challenges that remain apparent across the Sydney marketplace,” he said.

This, for Mr Lawless, makes it hard to explain why investors are not looking at better option like Perth, especially when looking at market fundamentals.

“Perhaps there is a level of herd mentality playing out, where more investment is flowing into the Sydney or New South Wales market despite the unaffordability and low rental yields,” he said.

Another reason could also be the significant volatility of the Western Australian housing values during and after the mining boom.

Following a surge from 2004 to 2014, Perth home values experienced a significant decline of 20% between 2014 and 2019, attributed to weak economic conditions and negative population growth in the region.

“The Perth market could be a strong option for investors, as is the southeast Queensland housing market, due to strong fundamentals including higher yields, a lower buy-in price, and a rapid rate of population growth that is driven by a combination of overseas and interstate migration,” Mr Lawless said.

“Both Western Australia and Queensland have a positive rate of interstate migration which better aligns to purchasing demand, as opposed to overseas migration that tends to be more aligned with rental demand.”

The table below provides a quick glance on how different market fundamentals are in Perth versus Sydney:



Median dwelling value



Change in value: Month



Change in value: Quarter



Change in value: Year



Median dwelling rent



Vacancy rate



Annual change in rent



Gross rental yield



Dwelling value to income ratio



% of income required to service a new loan



Annual population growth



Source:  CoreLogic, ABS, ANU.  Dwelling values and rents as at June 2023, dwelling value to income ratio and income required to service a loan as at March 2023, population growth as at December 2022.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
  • Low rates for purchase and refinancing
  • Simple online application process
  • No fees, unlimited redraws, 0.10% offset 
5.94% p.a.
5.95% p.a.
Principal & Interest
5.95% p.a.
5.95% p.a.
Principal & Interest
5.99% p.a.
5.90% p.a.
Principal & Interest
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .


Photo by @gettyimages on Canva.