Which city will end the year on top?
What city is going to have the best performing property market this year?
My bet is that it’s probably going to come down to a race between Brisbane and Perth.
Brisbane had a very strong year last year, but Perth’s property market seems to be attracting a lot of attention, particularly from Interstate investors.
The ABC has the story about east-coast investors pushing up prices:
East coast investors with no intention of moving to Western Australia continue to fuel Perth’s property boom, with one settlement agent saying she has never seen such high demand from interstate buyers.
Local real estate agent Grant Wilson estimated about 70 per cent of the area’s prospective buyers were based on Australia’s east coast.
BAFC Settlements licensee Anne Meiklejohn said the trend had only emerged in the past 12 months.
“In the past, we had very few investors seeking the opportunities over here,” she said.
… Ms Meiklejohn said the new buyer market was having a direct impact on property prices, with an Armadale home recently selling for more than double the previous listing price in 2018.
“It’s forcing prices up. People are offering more than what they are on the market for,” she said.
“We’ve had one [offer] come in at $80,000 above what was on the market.”
Partly this is a case of a rising tide lifting all boats, and many of the same factors driving the national market are at play in Perth. Like a boom in rents for example:
The latest data from the Real Estate Institute of WA (REIWA) put the average cost of renting in Perth at $600 a week, 15 per cent higher than the same time in 2022.
Real Estate Institute of Western Australia (REIWA) president Joe White said costs were not expected to change for some time.
“We do seem to see a little bit more stock coming on … and the rents [are] stabilising a bit, but we still have a pretty critical shortage of supply,” he said.
“I think we still have a fair way to go before we see the pressure ease off.”
But I think one of the reasons we’re seeing such a surge in interstate investor interest is probably just affordability. Compared to the other capitals, Perth has never been more affordable.
So I expect strong investor demand to continue.
Of course Brisbane has the same things going for it as well. It’s relatively cheap and rental returns are growing strongly. I’ve written about that a bit before.
So which city wins this year?
It’s a bit hard to say. But they’re both destined for big years this year I reckon.
DB