Why The East Is Looking West

Have you watched the news? Constant chatter about imminent carnage in the property market; interest rates are going up, house prices are dropping, the sky is falling. I agree… well to a point. That point being “which property markets have the sky falling on them?’

Let’s take a look at Sydney where million dollar loans are the norm. A 3% increase in interest rates represents nearly $400/w in extra repayments and according to the table below, house prices in Sydney and Melbourne are well and truly beyond their sustainable point and are tipped to drop 20+%.

So if I’m looking at the eastern states only (particularly Sydney/Melbourne), then yes, I’d agree with the doomsday sentiment ⤵️

Australian Capital Cities: Sustainable House Prices

ABA and Domain. Sustainable house price based on 6 x household income based on those household with a mortgage.

Now let’s jump across to Perth where we are seeing some far more compelling metrics. Average loan size is about half of Sydney and subsequently, even with rising interest rates it is still very affordable. WA’s budget is in surplus and the economic outlook is fantastic for years to come. With our population projections, affordability and economy, where is the downside? To me, Perth paints the most resilient picture in the nation and because of this we have seen a 40% increase in searches for WA property online.

There is a reason so many people are looking to Perth now. Low price point and high yields. For example: Where else can you pay $415k for something and receive an $850+/w income? WA you can.

See below for more details!