Western Australia leads nation in property investment growth, offering hope for renters

Western Australia has recorded the highest growth rate in property investment of any Australian state over the past year, with investor lending reaching a record $1.15 billion in April 2024, according to the latest ABS figures.

Kevin Young, President of Property Club, said that property investment activity in WA has surged by a massive 71.6% over the past year, compared to growth rates of 46.8% in New South Wales, 16.4% in Victoria, 44.8% in Queensland, 46.3% in South Australia, and 19.0% in Tasmania.

This surge in property investment is now starting to positively impact the rental market, with the Perth vacancy rate beginning to trend upwards in recent weeks and more than 300 additional properties available for rent compared to the same time last year, as per REWIA figures.

Mr Young noted that more than half of Property Club members throughout Australia are now investing in WA, attracted by the state’s relatively affordable property prices, higher rental yields, and strong economy compared to other major capital cities. He also cited anti-landlord regulations and high property taxes in other jurisdictions, particularly Victoria, as factors driving investors to Western Australia.

“A classic example is Victoria which surging property taxes combined with onerous regulations on landlords has resulted in many of our members exiting the State and deciding to invest in Western Australia,” Mr Young said.

He warned that this is leading to a state government-induced rental crisis in Victoria, with recent figures showing a significant drop in renter-occupied homes and active bonds over the past year.

Mr Young emphasized the crucial role of mum and dad investors, who account for more than 90% of all private ownership of rental properties, in solving Australia’s rental crisis. He urged state governments to adopt an “open for business” approach to these investors rather than discouraging them with red tape and higher taxes.

“The rental crisis will only be alleviated unless the State Governments adopt an ‘open for business’ approach to mum and dad property investors rather than trying to discourage them by more red tape and higher taxes as is the case in Victoria,” he said.