Perth property shortage drives investors to eastern states
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A severe shortage of property listings in Perth is pushing local investors to seek opportunities in eastern state capital cities like Melbourne, according to Nu Wealth Managing Director Daniel McQuillan.
Mr McQuillan said investors were running out of options in Perth due to a chronic shortage of properties for sale.
“This is underlined by the fact that there are less than 2,000 houses available for sale in the entire Perth metropolitan area and there is fierce competition from buyers when one becomes available,” he said.
The supply shortage has led Nu Wealth to encourage clients to diversify their portfolios by investing in cities like Melbourne.
Mr McQuillan noted that Melbourne’s median house price is only $8,500 higher than Perth’s, despite having a population of over 5 million people.
“Property prices in Melbourne have stalled over the past year due to oversupply issues and Nu Wealth believes that along with Perth it now offers strong potential for future capital growth,” he said.
The lack of supply in Perth has impacted investor activity, with ABS lending figures showing a decline in investor lending in Western Australia during June 2024, following several years of solid growth.
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“I believe investor lending during June fell in WA because investors are running out of properties to buy,” Mr McQuillan said.
He highlighted that some Melbourne properties are more affordable than their Perth counterparts, with apartments selling for up to $100,000 less than comparable units in Perth.
While rental yields are currently lower in Melbourne compared to Perth, Nu Wealth expects these to improve as demand starts to outstrip supply in the coming years.
Mr McQuillan believes both Perth and Melbourne will be standout cities for wealth creation in the Australian property market over the next decade.
“We believe that both Perth and Melbourne will be stand out capital cities for wealth creation in the Australian property market during the next decade and are committed to ensuring that our clients capitalise on this by taking a diversified approach to their investment portfolio,” he said.