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Where is the best place to buy an investment property in Perth?
Where is the best place to buy an investment property in Perth?

Are you thinking about purchasing an investment property in Perth?

Perth is a hotbed of activity and Kate Hill has her finger on the pulse to help you secure the right property for your investment portfolio.

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Hello everyone how are you all doing out there? I am genuinely interested. I’m Kate Hill bringing you the best unbiased and honest content on property along with some fantastic hints and tips. Today I have a little Perth property update for you, slash, word of warning.

[Music] Now Perth has been the shining property star for at least the past year, maybe two without question. We started buying quality real estate assets for our clients in our Western Australian capital quite some time ago, which means that obviously those properties have ridden the capital growth uplift over that time. But there is something unsettling happening in Perth at the moment. I’d say for the last few months actually that does make me a little bit nervous.

There are buyers purchasing really inferior property at ridiculous prices. I am hearing that there are even supposed buyers’ advocates paying through the nose for some what I would see as seriously dodgy properties. This current buying frenzy means that someone is likely to overpay for a half renovated cowshed on a main road next to a service station with a bus stop outside the front door.

There are a number of valid reasons why Perth has been experiencing such significant price growth.

Mainly it’s affordability with those rising interest rates, attractive yields for investors and really a very strong local economy. But all good things must come to an end and I believe that might just be starting to becoming the situation over there.

According to Terry Ryder from Hotspotting, Perth may have finished last year as the best capital city price growth performer but its market momentum has started to turn lackluster. The WA capital he says has been our strongest market for the past year and a growth market for long but the survey that they’ve done, so our survey, finds the first signs of slowdown, Mr Ryder said at the tail end of last year.

He goes on. Three months ago some 79% of suburbs had momentum in Perth but now only 54 do following a jump in plateau markets which are those that are no longer rising and starting to taper off. Perth has lost its position as a national growth leader according to our research said Terry Ryder.

Although it will be some time obviously before it shows up in the price data. So it’s not just me suggesting buyers adopt a more quarters approach in Perth this year even though this viewpoint might be unpopular. I know people love to follow the herd. One of the major problems with Perth that I am seeing at the moment is the quality of properties coming onto the market. What I mean is that they’re often terrible. So bad in fact that we’d be lucky, or I’d be lucky to investigate maybe one in 10 or 15 properties that comes onto the market that I don’t immediately reject, and this is often the case when markets are at or past their peak because owners of underwhelming properties decide that the time is right to offload their C or D-grade dwelling to the highest bidder.

And because right now people are buying anything and unfortunately that strategy often traps an unsuspecting buyer who has come a little bit late to that particular party, they don’t really know that they’ve missed both the main capital growth boat and are about to buy a real estate lemon. I’ve seen this in action over recent times in Perth where some people like I’ve said before are buying really at any cost and will likely pay the financial consequences for this further down the track. This is even more of a is even more of a serious issue in Perth because the majority of buyers are from interstate meaning that they often actually don’t know anything about that local market whatsoever.

They don’t know which are the superior and inferior locations, really down to street level over there so you just sort of take a stab in the dark and hope in vain for the best, and unfortunately this is also the strategy for a bunch of supposed buyers’ agents or buyers advocates who are chasing volume and just turn over, and they are not repeat business and they clearly don’t actually care where or what they buy for their poor clients.

So my advice to prospective property buyers this year in Perth is to consider whether that city is still the go-to location around the nation to park your hard-earned money, or whether there are other areas that are offering better prospects that no one else is really in a frenzy about yet. And if you do absolutely have to buy in Perth then I beg you do that extra round of due diligence when it’s you or someone else buying for you.

I will of course keep you posted on all things property from around Australia as our year progresses. It’s nearly the end of January. Don’t forget to hit the like and subscribe button if you are enjoying all the content and I will see you all again really soon.


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