The 2021-22 financial year is looking bright for Western Australia, with the latest Australian Bureau of Statistics figures showing droves of investors returning to the local property market.
According to the findings, lending to property investors in the state was up 209 per cent – from $161 million in May 2020 to $498 million recorded in May this year.
Nu Wealth Managing Director Daniel McQuillan said over the next financial year, he expected monthly spending by investors to double from what was seen during the last property boom in WA.
“Property investors study markets carefully throughout Australia, and WA offers them the best opportunities for high capital growth based on a low-risk environment,” he said.
“They understand people are now voting with their feet, with WA recording the highest level of interstate migration since 2013.
“Residents from other areas in Australia are moving to WA because of a surge in well-paid jobs in the resources sector, and this demand is set to continue.”
Mr McQuillan said to meet the demand for 40,000 additional workers in the resources sector by mid-2023, the Chamber of Minerals and Energy of WA was seeking to lobby the Federal Government to free up skilled migration.
“The industry association recently commissioned a report by consulting firm Pit Crew Management Consulting Services that showed WA could face a peak shortage of 33,000 workers in two years,” he said.
Along the same vein, Mr McQuillan also drew on research by the Urban Development Institute of Australia, which has indicated land supply will be exhausted in around four years in some areas of Perth, meaning investors should focus on locations with high demand and limited supply.
“Location, location, location is the key consideration for investors seeking to purchase property in Perth over the next financial year, and they should seek out the most expert information to achieve the highest returns,” he said.
“With banks now offering investors incredibly low interest rates, it is a no-brainer to purchase property in prime areas of the state where investors can easily achieve significantly higher rates of capital growth compared to their annual interest rate on borrowings.
“In Perth, for example, Nu Wealth has assisted investors to purchase properties now achieving an annual capital growth rate of 10 per cent, compared to borrowing costs of less than three per cent.
“This does not include strong rental returns of more than five per cent because of the huge demand for rental properties in Perth due to low vacancy rates and a rising population.”
According to Mr McQuillan, there has been a combined return of more than 15 per cent achieved by the company’s clients.
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