Between 2002 and 2005, the Perth property market received a massive boost from eastern states investors wishing to take advantage of lower prices.
During the period 2002 to 2005, the Perth property market received a massive boost from Eastern States property investors and history is about to repeat itself in 2017 according to Shane Kempton, CEO of Professionals.
Kempton said that back in 2002, the number of property investors from the Eastern States doubled in Perth due to a major gap in real estate prices between the East and West coasts of Australia.
“Property Investors in the Eastern States back in 2002 regarded the Perth real estate market as undervalued and having higher rental yields compared to Eastern State capital cities.
“For example, the median house price of a home in Sydney during the March 2003 quarter was $460,000 compared to the median house price in Perth of $202,600 – a price difference of nearly $260,000.
“In comparison, during the March quarter 2000, the median house price in Sydney was $308,000 compared to $149,900 – a price differential of $158,000.
“In addition, back in 2002 rental returns from Perth investment properties were generating returns in excess of 5% whereas in Sydney returns had fallen to less than 4%.
“Fifteen years later in 2017, we have virtually the exact same set of circumstances as back in 2002/2003 with the median price of a home in Perth half the price of that in Sydney and rental returns in Perth now higher than Sydney.
“The Perth market is less than half the size of Sydney so it will not take much activity from Eastern States investors to ‘kick start’ the Perth property market in 2017.
“A boost in property sales from Eastern States investors will give confidence to local Perth buyers to re-enter the market and we could see a snowball effect in rising property sales during 2017.
“With commodity prices on the rebound and signs that the WA economy is in a recovery mode, now is a great time to buy property in Perth before any rebound begins to occur.
“Currently there are a large number of properties in Perth now that are highly affordable within a 15 kilometre radius of the Perth CBD.
“For example, astute buyers can purchase older style apartments and villas in these near city suburbs for below the median house price of the city which is fantastic value when you consider property prices in similar locations close to the CBD areas of Sydney and Melbourne,” he said.