South West WA August 2017

The month in review: South West WA

By Herron Todd White
August 2017

Investors in the south west tend to be directly competing with first home buyers at the lower end of the market i.e. the $350,000 to $500,000 price bracket. They tend to be more active in the new housing market within major developments such as Treendale, Dalyellup, Provence, Vasse and Brookfield. Rents remain relatively high historically offering yields of between 4% and 5.5%.

A growth area for investors is smaller homes on cottage size blocks which are more affordable and have less maintenance of lawns and gardens. They are however also competing in this section with the retiree purchasers also looking to downsize with lock and leave style properties.

There has been some developments associated with the National Rental Affordability Scheme (NRAS) which have attracted investors with dual key properties which provide good rental returns however the entry cost on a house and land development basis are at the upper end of the value range.

There is a definite lack of affordable rental properties in the region particularly in smaller 2- and 3-bedroom, 1-bathroom dwellings or units for which there is strong demand. However this is a section of the market that investors appear reticent to enter. These would also prove affordable alternatives for first home buyers.

In short investors are still active in the south west market albeit predominantly at the lower end of the new housing market.