Last updated: 25 Jan, 2022
The Perth property market has been extremely well-behaved despite the gloomy forecasts due to the pandemic. In fact, properties in Perth are selling the quickest they have since 2006!
According to Domain Property Prices, Perth is the second most affordable city to buy properties right now. The average house price in Perth is $563,214, while for units it’s $347,585. Both have overtaken 2020 figures by 6.3% and 4.4% respectively.
The 2020 stock of unsold real estate has also been added to this year’s supply of properties, which means you’d be spoilt for choice as a property investor. But when looking for your next investment, keep in mind what tenants now prefer - spacious houses in growth suburbs away from city centres.
Meanwhile, lower interest rates, long-term housing benefits and higher investor confidence seem to be working their magic on how the property market in Perth is now. You definitely won't be alone in wanting to get your foot in the Perth property market.
In this part of our real estate news, we’ve compiled a list to help you identify which suburbs to invest in Perth for 2022 based on rental yields and capital growth rates, as well as what the experts out there are saying.
These suburbs are in no particular order, and we fully recognise that there are other great options out there that we haven't included in our list.
1. South Perth
⭐The Perth suburb to invest in if: you’re fine with holding the investment property for a long while.
South Perth is the only suburb that is quite close to the CBD on this list, located 4 km away just across the Swan River. Since September 2020, the vacancy rate has been sliding downwards in this growth suburb, now at 1.6%.
It’s a special suburb as it's a combination of high rise skyscrapers, villas and townhouses.
If you’re considering long-term and anticipating the hype for out-of-town suburbs to die down, this might be your best bet in the Perth property market.
It’s ideal for established families and mature adults while the apartments are perfect for professionals who are still keen on commuting to work. Picturesque locations, proximity to schools, sports and social clubs make it a community-friendly suburb.
You won't see high growth rates in the first couple of years after buying, but experts are expecting a great comeback in the long-term, which could make it easier to get your hands on a property here right now.
- Median property price South Perth: $1,250,000 for houses, $525,000 for units
- Average rental yield South Perth: 2.3% for houses and 3.8% for units
- 5 year compound growth rate for South Perth : 0.7% for houses and -1.1% for units
⭐The Perth suburb to invest in if: you believe in the regional property market hype and need a very affordable property.
Another growth suburb in the outer coastal region of Perth, Yanchep’s house prices are now going as cheap as $370,000.
The work from home trend in the property market has put Yanchep on the radar for many investors, even if it's 56 km away from the CBD. It's a beachy suburb filled with spacious but affordable homes.
As a property investor, you have a lot to gain from the infrastructural enhancements coming up in Yanchep. Better roadways and airport expansions always meant good news for the property market, and Yanchep is no exception.
Vacancy rates are as low as 0.17% right now with about 19% of the population in the suburb being renters, which is quite a healthy tally.
It's a superb option for investors who are struggling to deal with high house prices since you still get strong growth rates and a healthy rental yield. The only thing worth mentioning is that growth will slow down if demand for inner-city living goes back up.
- Median property price Yanchep: $375,000 for houses
- Average rental yield Yanchep: 4.5% for houses
- Year-on-year growth rate for Yanchep: 6.99% for houses
⭐The Perth suburb to invest in if: you're a first-time home buyer looking to positively gear your property.
Clarkson is in a residential area north of the Perth CBD, just a 30-minute drive from the city centre. It has all the amenities your tenants would want, a railway station, reputed schools and community centres a few minutes away. All of this contributes to low vacancy rates at 0.63% and strong rental yield at 4.93% on average.
Rentals here are in super high demand at the moment, and Clarkson is tipped for immense growth. Combined with the fact that houses are quite affordable, it's an especially strong investment for first-time homebuyers, particularly so if you're looking for a positively geared property.
- Median property price Clarkson: $375,000 for houses, $250,000 for units
- Average rental yield Clarkson: 5.0% for houses and 6.7% for units
- 5 year compound growth rate for Clarkson: -2.4% for houses and -5.4% for units
This leafy suburb is just a 20-minute drive from Perth CBD and is also tipped for growth in the Perth property market.
Although the growth of its property value has been weaker over the past couple of years, Forrestfield is giving property investors some serious cause to think about lately. Its rental yield of 4.8% and low property prices of $400,000 is a valid factor for investors to consider.
According to Paul Blakeley on savings.com.au, Forrestfield will benefit from the new railway hub and its recreational opportunities. This is one of the main reasons why it made into the list of best suburbs to invest in Perth in 2022.
With house prices as low as $400,000, if you’re looking for budget real estate, then Forrestfield should be on your shortlist this year. We recommend you keep it in your peripheral vision if you're struggling to get your hands on properties elsewhere like Clarkson.
- Median property price Forrestfield: $400,000 for houses, $322,000 for units
- Average rental yield Forrestfield: 4.8 % for houses and 4.8% for units
- Year-on-year growth rate for Forrestfield: 6.00%% for houses and -3.5% for units
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Wandi is growing slow and steady but is primarily becoming popular due to the growth suburb's high rental yields, currently at 4.10%.
Prices for houses have fallen here for the last 3 years, but things have just turned for Wandi due to the preference towards larger, more spacious homes in regional areas for buyers and renters.
Vacancy rates here are as low as 0.5%, most likely because of its ease of access to the city if you need to swing by, as well as a number of shopping centres, fashion and restaurants in the Honeywood district.
It's a strong suburb if you're looking for good rental yields and modest growth.
- Median property price Wandi: $510,000 for houses
- Average rental yield Wandi: 4.1% for houses
- Year-on-Year growth rate for Wandi: 3.93% for houses.
⭐The Perth suburb to invest in if: you're looking for strong rental yields
Como is a Perth growth suburb that has defied the odds of the gloomy forecasts for inner-city suburbs.
On this list, it's the only suburb that is properly close to the CBD, but due to its top-quality, seaside housing, it's still growing and will continue to do so. It also still remains a hotspot for students and city workers, so rental yields are strong.
You see, not much has really changed in Como. Its relaxed vibes and seaside cafés, iconic architecture combined with developed units are proving to still be favoured by buyers and renters.
If you're someone who puts an emphasis on strong rental yields, Como should catch your eye.
- Median property price Como: $840,000 for houses, $460,000 for units
- Average rental yield Como: 3.0% for houses and 4.7% for units
- Year-on-year growth rate for Como: 4.1% for houses and -1.1% for units
Featured by Rich Harvey from Propertybuyer Scarborough is catching attention as a growth suburb in Perth.
The reason for this is that it's a relaxed beachside suburb that offers the kind of lifestyle residents are now eager to enjoy. This is ideal for tenants who prefer to work locally. Residents here are both independent youth and retirees with higher than average disposable incomes.
Situated only 14 km north of Perth, Scarborough is only a km away from lush beaches. The properties here are a mix of apartments, townhouses from the 60s and 90s, and even seaside mansions.
For these reasons, it should come as no surprise that about 32.80% of the population in the suburb are renters, and the vacancy rate is low at 1.06%.
You'll have a leg up when you're trying to find tenants if you get your hands on a rental property here. Apart from that, it's in general a strong all-rounder, definitely worth being on your shortlist.
- Median property price Scarborough: $765,000 for houses, $450,000 for units
- Average rental yield Scarborough: 3.7% for houses and 4.9% for units
- Year-on-year growth rate for Scarborough: 3.57% for houses and 2.04% for units
Honorable mention: Busselton
According to property expert Rich Harvey, Busselton is one of the top suburbs to invest in Perth in 2022.
Busselton issituated 200 km to the south of Perth. Yet, the work from home trend has favoured outer suburbs than the city centres following the pandemic. Living closer to the beach seems to tempt tenants since it’s too good an opportunity to pass.
Properties are pretty affordable here, with house prices averaging $495,000 and a rental yield of 3.9%. The vacancy rate here is 0.2%, which only supports Busslton’s claim to be a star growth suburb in 2022.
This suburb has gained a reputation for a quick drive to the airport, and as a place for cultural and musical events. In another 5 years, the population here is likely to double.
For these reasons, we've seen Busselton make it into a number of investing experts' lists for the top 10 growth suburbs in Perth in 2022.
- Median property price Busselton: $495,000 for houses, $405,000 for units
- Average rental yield Busselton:: 3.9% for houses and 4.6% for units
- 5 year compound growth rate for Busselton: 0.6% for houses and 1.2% for units
Final Thoughts on Which Suburbs to Invest in Perth for 2022
Perth’s property market forecasts a 6-10% growth for most properties ranging from luxury to semi-luxury. Meanwhile, Property Update also mentions Perth’s rental market is in a bottleneck with low vacancy rates.
This could spell out more opportunities for property investors as it will add to the supply of rental properties in this city. With more people interested to live in Perth, finding tenants shouldn’t be too big a burden for you.
However, a word of caution. Do your research to figure out the suburb’s property growth rates and how well it fares in terms of attracting tenants before you invest. This should help you make the projected rental yields a reality sooner than later.
Finally, to sustain the growth of this city, a number of changes in the economy are expected. Look out for structural changes planned for Perth in the property market news, as it could shake up where the growth is happening.
Apart from that, regional Perth is looking really strong with lots of affordable properties in high growth areas.
Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.