Rents for Pilbara homes have dropped by 71.4% since their peak in 2011, according to an article yesterday in the West Australia. Such a drastic drop puts into perspective the relatively smaller decline of 7.4% in Perth rents over the last year. Reflecting on this situation, the risk was always there for investors in the north of WA, although few predicted that rents would drop so far, so fast. Looking forward, what are investors to do? Focus on building a portfolio of ordinary houses in Perth first, before looking further afield. Perth has a diversified economy, great lifestyle and a positive long-term economic future. Although the rental yields in mining towns can appear attractive, the risk is too high for most who only have a portfolio of one to four investment properties. Wait until your fifth or higher property before taking the risk of investment in properties outside capital cities and major economically-diversified towns. Housing’s highest and best use is as a store of wealth, not as a subject of speculation.

Rent shock as resources boom ends

 


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According to REIWA President Hayden Groves, “The rental market has also showed signs it is stabilizing with weekly rents increasing across the board and listings at levels consistent with the month prior.

We are experiencing the threat of an economic downturn. Softening market can be attributed to seasonal effect and we have seen last quarter. Perth is performing well and no signs of bottoming for falling of house prices.

Based on the latest preliminary REIWA.com. data, Perth rental market is stabilized. Median rent is increasing by $5 to $400 last month. Is this the sign of having stabilizing market? Median price surged, therefore in 2016, we would see an upswing in Perth property market with rental yields of 4%. Old properties and land values are the key driver to attract buyers and investors. We have more rental listings in Perth and predicted to have higher demand for the coming months.

http://reiwa.com.au/about-us/news/perth-property-market-shows-signs-of-stabilising/

 

 


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