Free Sale Appraisal and property managers have thought the words before, but most have avoided saying them. However, Your Investment Property Magazine “spilled the beans” recently, calling current market conditions a “perfect storm” for investors. Let’s take a look at some of the factors that have caused a lot of professionals in the Perth area to agree with the assessment of a “perfect storm.”
Low interest rates
The RBC has reduced their interest rate to an all-time low of 3%, and one lender is reported to be currently offering a 4.99% three year fixed rate, which is the lowest in at least 20 years.
Property values have not returned to their peak
While median prices in the Perth metropolitan area are on the rise, they have still not risen to their peak prices. This makes investment property in Perth a relative value, as investors can buy houses as a long-term investment, wait out the market, and bank on a long-term rise in value. In the history of recorded real estate prices, there has never been an era in which this would not have been a successful investment strategy.
High rental yields
Current rental yields in six of the capital cities range from 5.19% to 6.22% for rental units, while the rental yield for houses is higher than 5.20% in four of the capital cities. It is a matter of simple math that 5.19% is greater than 4.99% which is the mortgage rate quoted earlier in this piece.
Extremely low vacancy rates
Due to a current vacancy rate of 0.8%, it is a lot easier for owners of investment property in Perth to keep their houses and rental units filled, thus maximising income.
Is it really a “perfect storm”?
We don’t know if we would go quite that far, the conditions certainly are optimum for great results from investment property in Perth. Besides all of the factors listed above, there’s a hidden factor that makes a long-term investment very profitable. In 25 years, rents will probably have doubled, while your mortgage payment will still be the same. Also, your property could easily double in price by then.
Call 1300 472 427 today and talk to one of our property managers in Perth.
