WA property market braces for strong east-coast buyer migration

In the 10 years preceding the COVID-19 pandemic, Western Australian real estate agent Graeme Baxter sold two, or maybe three at most, properties to purchasers living on the east coast.

In the last 12 months, he’s sold closer to 40, and all – courtesy of that impenetrable border – sight-unseen.

“I’ve been in this industry a long time, and I’ve never experienced this level of inquiry, and sales, to people on the east coast,” says Baxter, principal of ACTON Mandurah, on the south-west coast 72 kilometres from the Perth CBD.

“I think we’ve had a pretty good run with COVID, our economy is good, we’ve got low unemployment and our property is very affordable, especially with interest rates so low. A lot of our units, for instance, are half the price of those in Sydney, Melbourne and Brisbane.”

Western Australia has certainly never before figured quite so prominently on the investment landscape for all Australians.

Investors are now particularly looking at units along the west coast with that promising price differential.

According to the latest Domain House Price Report, the median price of apartments in Perth is the third-lowest in the country, at $380,353 – up 8.4 per cent over the last year – only a whisker above Adelaide’s at $380,349 and Darwin’s at $326,159.

That Perth price point strikes a dramatic contrast with Sydney’s $802,255, Melbourne’s $593,387 and Brisbane’s $416,033, while seaside Mandurah units compare even more favourably, at a median of $245,000, up 6.5 per cent on December 2020.

But most locals expect prices to surge even more strongly over the next year, particularly after the border opening.

“We’re expecting an influx of people coming from the east coast then, with mass migration into Western Australia,” says Daniel Ranshaw, property consultant at Perth agency Hub Residential.

“There’s really not much property to rent for them, so we’ll see that pushing up the price of apartments, with those on the waterfront particularly at a premium. We’re short of labour so we’re offering a lot of employment and resources to people and they’ll be coming to take advantage of that.”

The lure of buying an apartment on the waterfront will be particularly strong, with plenty of waterfront available on the Swan River, all the way from East Perth to the western suburbs, Crawley and Claremont to Fremantle, as well as the beaches.

“As the old saying goes, they’re not making much more waterfront land,” says Damian Collins of Perth-based property advisory Momentum Wealth.

“In addition, apartment living in Perth is still very much in its infancy; a long way behind Sydney and Melbourne.

“But now we’re finding a lot of baby boomers want to live in them so they can lock up and leave when they want to, and younger people are keen on the lifestyle too.

“We’re unlikely ever to have an oversupply like in some areas on the east coast, and I think they’ll be very strong performers over the decade ahead.”

Down in Mandurah, rents have risen 20 per cent, Baxter says, and returns are running at a healthy 5 to 6 per cent.

“We have very high demand for rental properties and not much supply, with a low vacancy rate as a result,” he says.

“You can see why so many people from the east coast are buying here. I’m originally from Sydney but the best part of Sydney is when the plane takes off for the flight back here.”