The new Property Sentiment Report for the second quarter of 2024, from Australian Property Investor (API), shows a big change in where property investors are looking. There’s a clear drop in interest in Western Australia’s property market, which used to be very popular. Instead, investors are increasingly interested in the eastern states, especially New South Wales (NSW) and Queensland.
Decline in Western Australia’s Property Market
Interest in Western Australian property markets has significantly decreased. Perth, which once saw record-high property prices due to affordability, high rental yields, and a strong economy, now faces a shift. As of June 2024, the median house price in Perth is $665,000. However, the latest API report shows that interest in Perth’s real estate is waning. Investor enthusiasm has dropped by 25%, with only 16% of respondents now considering it a top investment option.
The report suggests this decline might mark the end of a strong growth period for Perth’s property market. Even though rental yields remain high, a drop in investor interest could deeply impact Western Australia’s market.
Eastern States Rising
On the other hand, the eastern states are seeing a boost in investor interest. Queensland remains the top choice for investment, with its appeal rising from 32% to 33% among investors. This ongoing interest highlights Queensland’s strong position in the property market.
New South Wales has also seen a notable increase, with investor sentiment rising from 20% to 26%. This suggests that NSW, including Sydney and nearby areas, is becoming a more attractive option for investors. The report hints that this growing interest might lead to increased growth in Sydney’s real estate sector and its surroundings.
Recent data from the Australian Bureau of Statistics (ABS) shows that investor lending is growing faster than owner-occupier lending. In June 2024, new loan commitments went up by 1.3% to $29.2 billion. Of this, investor loans increased by 2.7% to $11 billion. Investor loans are up 30.2% from last year, while owner-occupier loans have risen by 13.2%.
The head of finance statistics at ABS pointed out that New South Wales has the largest average loan sizes. In June, owner-occupier loans averaged $780,000, and investor loans averaged $818,000. This suggests that NSW is becoming more attractive to property investors.
Some suburbs in NSW are showing strong growth and may start mirroring the growth of Western Australia in the near future.
Wrapping Up
The Australian property market is changing, with Eastern states becoming more popular as Western Australia’s market slows down. Investors are now focusing more on Queensland and New South Wales, attracted by their growth potential and high average loan sizes. These shifts are likely to impact future investment plans and the property market across Australia.
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