Perth property market could lose its shine to east-coast buyers
West Australian, Perth
June 25, 2024
RAQUEL DE BRITO
Perth may soon lose its mantle as the nation’s hottest investment market after it was shunned in a new report, with a leading national investment expert advising frenzied east-coast buyers to look elsewhere.
WA failed to secure a single spot on a list of the nation’s top 50 “supercharged suburbs” by the property research and analysis website Hotspotting, after making up more than a third of the list last year.
Instead, New South Wales led the charge, with 26 suburbs making the cut, as well as 10 suburbs in Victoria, six in South Australia, five in Queensland, and three in the ACT.
The report, which analysed sales activity as an indicator of future price growth, prompted Hotspotting director Terry Ryder to warn investors against diving into the Perth market and grabbing anything they could for any price.
“In terms of the methodology we use for this report, there are not very many suburbs in Perth, compared to 12 months ago, where sales activity is rising,” he said.
“We’re also seeing other evidence that the Perth market has peaked, particularly at the top end, where we’re seeing prices flatlining or falling, which is often an early indicator that a boom is getting close to having run its course.
“Anecdotally, a lot of investors are just diving into the Perth market, grabbing anything they can, paying any price without too much regard for the quality of the location or the property, and I just think it’s herd mentality.
“It’s not people making sensible buying decisions based on research and I think some of those people will regret their buying decisions in the future.”
From an investment viewpoint, Mr Ryder said it would be better for buyers to focus on other places.
“The ideal time to be in the Perth market was three years ago, and we actually started recommending Perth three years ago, and at that time there was quite a bit of pushback because it had not performed for 10 years,” he said.
“No one was interested then but everybody wants to buy there now after three years of growth, and that’s the herd mentality at play.
“You want to be buying in markets before the prices rise when it’s early in its growth cycle, and people have missed that in Perth if they haven’t bought there already, so they should now be focusing as investors on other parts of the country.”
Mr Ryder said he would also recommend investors look at WA’s regional areas over Perth if they wanted to buy in the State. “Bunbury is a very strong market, it’s already had some good growth, but I think there’s some more to come for Bunbury, and we think Geraldton is very underrated and very affordable, and we see growth underpinned by an improving economy,” he said.
