Which capital cities are most attractive to property investors?

By Jon Bragg

May 17 2022
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A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities.

Perth has been rated as the most popular capital city property market, according to a survey of property investors planning to buy within the next year.

The national survey from Perth-based property advisory Momentum Wealth found that 40 per cent of investors preferred the West Australian capital, beating out Brisbane which was seen as the preferred market by 32 per cent of investors.

“With a large response from WA-based investors, we expected some homegrown preference in our survey results,” explained Momentum Wealth MD and founder Damian Collins.

“However, our findings confirm that Australia-wide, investor confidence in Sydney and Melbourne is experiencing a decline, while Perth and Brisbane are gaining traction as preferred investment markets.”

Only 11 per cent of investors chose Sydney as their preferred market, while just 7 per cent said that Melbourne was the best location to invest.

The other capital cities ranked even lower, including Adelaide (5 per cent), Hobart (3 per cent), Darwin (1 per cent) and Canberra (1 per cent).

Those investors who favoured Brisbane cited the city’s affordability (35 per cent), its place in the housing cycle (29 per cent) and being named as the host of the 2032 Olympic Games (22 per cent) as the top reasons.

Meanwhile, those who chose Perth pointed to the value of the city’s property market (43 per cent) and its position in the housing cycle (21 per cent).

“Perth in particular offers investors considerable value for money,” said Mr Collins.

“The latest Housing Affordability Report by the Real Estate Institute of Australia confirms that in the December quarter of 2021, 26.2 per cent of household income was needed to service a home loan in WA, compared to 37.3 per cent in Victoria and 46.5 per cent in NSW.”

CoreLogic’s latest Home Value Index revealed that house prices in Perth moved 1.1 per cent higher during April despite declines in Sydney, Melbourne and Hobart.

Dwelling values in the capital reached a new record high according to the firm, after surpassing the previous record set in mid-2014 by 0.9 per cent.

Mr Collins predicted that growth in Perth would continue this year thanks to strong economic conditions, the continued tightening of stock on the market and an expected rise in demand.

“While stock levels remain well below long-term averages, the return of interstate and overseas migration into Perth will also underpin a significant uptick in demand for housing, so there is plenty of upside for investors who get into the market now,” he added.

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