Perth ranked best location for property investors, with top 5 city markets revealed

A once overlooked area has become the nation’s top boom market for property investors, with a new report revealing the types of homes that will earn buyers the most money.

Perth has become the nation’s strongest property market and the location where real estate investors are most likely to make money from home value growth and soaring rents, a new report shows.

The analysis from research group Hotspotting showed the Western Australian capital scored the highest on a range of future home price rise indicators, including sales activity, buyer demand and major infrastructure projects.

The rental market was also considered favourable for investors, with rental returns in most Perth suburbs remaining well above capitals on the eastern seaboard.

“From its recovery status in 2020, Perth’s property market changed into a boom market in 2021 and 2022 – and has continued its strong performance in 2023,” the Hotspotting report said.

“The western capital city is now the nation’s strongest property market, with two-thirds of its suburbs maintaining high levels of sales activity in defiance of the nationwide downturn pressures.”

The City of Stirling, which includes popular beach Scarborough, was named the best location for investors within Perth.

The report noted that Western Australia’s economy has forged ahead since 2020, fuelled by high population growth, a rising resources sector and effective management of the pandemic.

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Perth also had one of the lowest unemployment rates in the nation, making it a safer market for real estate investors.

The five Perth markets, or local government areas, with the strongest property price growth prospects were the City of Stirling, City of Canning, City of Rockingham, City of Swan and City of Armadale.

Hotspotting General Manager Tim Graham said the Perth market was experiencing performance levels double those recorded in the five years before the pandemic.

Defence spending is expected to boost property prices in the City of Rockingham. Picture: Defence

The City of Stirling, a middle-ring precinct north of the Perth CBD that includes bayside locations like Scarborough, was the star performer, Mr Graham said.

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Local real estate prices were set to get a boost from the $100m Scarborough Beach redevelopment and the $800m Karrinyup Shopping Centre expansion, among other projects.

“The strongest sector in the Perth market is the City of Stirling,” Mr Graham said.

“It has a range of price points, with several suburbs with median house prices above $1m but also suburbs with median prices between $370,000 and $550,000.

Perth has one of the lowest unemployment rates in the country.

“Of the 24 City of Stirling suburbs in our analysis, the vast majority – or 20 out of 24 – are classified as rising or consistency markets.”

Other hot spots identified in the report include the City of Swan in the northwest, where eight of the 11 suburbs in the analysis are either rising or consistency markets.

Prices in the City of Canning would get a boost from a $76m City Centre Regeneration Program over 10 years and new train stations with links to the CBD.

“Numerous government incentives for first home buyers are adding further momentum to Perth’s property market and are a beneficial factor for the young families who dominate the City of Canning’s landscape,” Mr Graham said.

“Amid the vibrant activity across Perth, the suburbs of Canning City feature strongly.”

The City of Rockingham would get property price growth due to a $365m defence project in the area and was attractive for first home buyers and investors because of the lower prices.

Affordability was also identified as a big price driver in the City of Armadale, where a $4.3bn shipbuilding project is planned, along with a $237m upgrade to main thoroughfare Armadale Rd.

Mr Graham said further growth and opportunities are expected in the future, with the City of Armadale marked for infrastructure development by the Federal Government, encouraging additional business, industrial and residential projects.

“The revival in this precinct is supported by some of the lowest vacancy rates – currently well below one per cent – in Perth’s metropolitan area,” he said.