STAY UP TO DATE WITH LO­CAL REAL ES­TATE

Pilbara News - - Lifestyle - Hay­den Groves Hay­den Groves is the pres­i­dent of the Real Es­tate In­sti­tute of WA.

Much has been made in re­cent times about the WA rental mar­ket favour­ing ten­ants.

While it cer­tainly is a good time to rent and ten­ants do have a healthy sup­ply of stock to choose from, this does not mean prospec­tive in­vestors should be de­terred from us­ing prop­erty in­vest­ment to help se­cure their fu­ture.

First and fore­most, real es­tate mar­kets are cycli­cal. While at present you may not reap the higher weekly rent prices ex­pe­ri­enced sev­eral years ago, there are still plenty of ben­e­fits to in­vest­ing in prop­erty in WA.

For starters, it’s a good time to buy. In fact, you could ar­gue there is no bet­ter time to take ad­van­tage of more af­ford­able hous­ing prices to se­cure your first in­vest­ment prop­erty or add to your port­fo­lio.

The real es­tate mar­ket will in­evitably change with cur­rent times, hint­ing the Perth mar­ket has be­gun to sta­bilise and pro­vide the op­por­tu­nity to se­cure an in­vest­ment in a softer mar­ket, which ought to de­liver stronger growth op­por­tu­ni­ties into the fu­ture.

It’s a smarter move than buy­ing at the top of the mar­ket cy­cle.

You may be con­cerned about find­ing a ten­ant to lease your prop­erty. Although rental stock has de­clined re­cently, there is no deny­ing it re­mains higher than the long-term av­er­age.

How­ever, Perth’s rental mar­ket is ex­hibit­ing some en­cour­ag­ing signs for in­vestors, with list­ings stock fall­ing below 10,000 for the first time in about 18 months and the me­dian rent price is steady at $350 a week.

Ten­ant ac­tiv­ity is also no­tice­ably higher and in May we ex­pe­ri­enced the high­est leas­ing fig­ure ever recorded in Perth.

Ten­ant de­mand is cer­tainly there. Speak to a REIWA prop­erty man­ager or buyer’s agent about what ten­ants are look­ing for in a rental.

The other thing to keep in mind is although weekly rent prices may be lower than they used to be, so too are of­fi­cial in­ter­est rates, which have re­mained at the his­toric low of 1.5 per cent since Au­gust, 2016.

This is a big ad­van­tage for prop­erty in­vestors in the cur­rent rental land­scape, help­ing Perth de­liver a much stronger rental yield than prop­erty in the Mel­bourne and Syd­ney mar­kets where en­try-level prices are high.

An­other ben­e­fit of prop­erty in­vest­ment is neg­a­tive gear­ing. With both sides of Fed­eral politics ei­ther promis­ing to main­tain the tax­a­tion ben­e­fits of neg­a­tive gear­ing or “grand­fa­ther­ing” the rules such that those with ex­ist­ing in­vest­ment stock won’t be dis­ad­van­taged, plan­ning for your fu­ture through prop­erty ac­qui­si­tion re­mains an in­tel­li­gent, long-term op­tion.

Prop­erty in­vest­ment is a long game.

Real es­tate mar­kets will al­ways ebb and flow, so it pays not to get caught up in the here and now of short-term mar­ket volatil­ity.

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