There are growing opportunities for investors to take advantage of favorable market conditions in the Western Australia region.
Earlier this week, REIWA released its March quarter data, which shows the WA region had another strong quarter. Eight of the nine regional centers saw an increase in the median home sale price in the three-month period, while all nine saw median home price growth in the 12 months to March 2022.
This price growth trajectory extended to the rental market, with data from reiwa.com revealing that all nine regional centers saw median rental price growth in the 12 months to March 2022. That’s low vacancy rates and fast median lease terms, and it’s clear there is strong demand for rentals in areas.
With regional sales and rental markets simultaneously experiencing strong demand, should investors look outside of Perth?
The type of investor who would be well placed to buy in the WA region is one who has built an established portfolio. Investors with established portfolios can generally take more risk, but this strategy should be considered with caution.
Although investing in regional areas is potentially more risky than large cities, regional investments also have the potential to offer a greater upside. If a regional city’s economy is booming, it can lead to skyrocketing real estate prices, which we see in several regional centers.
For example, the booming commodity market in Pilbara has recently led to strong price growth in Port Hedland and Karratha. In fact, Port Hedland was the best-performing regional hub in the 12 months to March 2022, with its median selling price rising 40.6% to $457,000 during that time.
It is clear that with such price growth, there are good opportunities for investors, but this must be undertaken with caution. Is this market prone to big ups and downs? Should buyer demand remain strong in the region? What projects or investments are planned in the area that could impact demographic trends and housing prices?
Every investor’s plan is different and there is no one size fits all strategy for real estate investing. If you’re considering investing in the regional WA, it’s a good idea to speak with a qualified investment professional to discuss the right approach for you.