The Western Australian property market has bounced back to pre-GFC property price levels, according to WA brokerage House + Home Loans and Rate Detective Finance.
The brokerage said the recovery has been seen across both metropolitan and regional markets but regional Western Australia saw more noted spikes in value due to mineral and mining-driven demand.
House + Home Loans managing director Rael Bricker and Rate Detective Finance managing director Warren Dworcan believe the significant improvement can be attributed to four factors:
1. Investors showing more confidence in the property sector
2. Rental yields exceeding historical levels
3. Valuation firms responding to the increased values and reflecting these in their reports
4. Interest rates at historical lows, enabling most rental yields to exceed interest rates
Of these four, Dworcan said rent yields were the main driver of the renewed activity. “Due to high demand, current metropolitan rental yields are in excess of 6%. This surpasses the pre-GFC level of 5%. Corporate and fully furnished property leases are experiencing almost unheard of rental yields of around 7-9%.”
Dworcan added that the current state of markets in mining towns is driving rent yields as high as 15%.
