By Terry Ryder, 17th October 2012
The recent strong rise in residential rents in Perth is a pointer to an emerging phase of price increases.
The strongest markets for real estate investment around Australia, including Gladstone and Mackay in Queensland and Darwin in the Northern Territory, have all been led by big increases in rents.
Rents lead and prices follow - that has been the rule for the nation’s boom property markets.
Perth is set to follow this trend. Australian Property Monitors records a 15.4% rise in the median house price for Perth in the past 12 months. The median rent for apartments has climbed 11.4%.
The only capital city with bigger rent rises is Darwin, where the house median rent is up 27% and units up 15%. Darwin prices have started to follow, with RP Data recording a 4% increase in Darwin’s home value index for the September Quarter.
Perth prices so far have moved little but that is soon to change. Strong demand for accommodation has led to a 0.5% vacancy rate (according to the latest figures from SQM Research) and WA housing finance commitments by owner-occupiers are up 18% in the 12 months to the end of August (the biggest jump in the nation).
WA also has the nation’s strongest economy and leads on population and employment growth.
Against that background, price growth is inevitable. The new edition of our Top 10 WA Hotspots report highlights six areas of Perth primed for price growth, as well as four regional locations with strong capital growth prospects.
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