Regional Western Australia has become an increasingly enticing option for investors, with demand for rental properties leading to increased rental yields across the state. Rental yields are a useful metric for gauging the potential return of an investment property, and measure the rental income generated by an asset as a percentage of the property’s value. A higher yield translates to a favourable annual return for investors.
For context, typical gross rent yields across Western Australia were at 4.7 per cent as of September, up from 4.6 per cent one year ago. Recent figures from REIWA revealed the top five regional centres in the 12 months to September 2020 with Broome, offering a 6.1 per cent gross rental yield, $470,000 median property sale price and a median rent of $550.
REIWA Deputy President Joe White said “Broome is what I’d call a choice destination,” he said. “Somewhere where people don’t have to move to, but would like to move to. Say, for argument’s sake, people had holiday homes or were thinking of moving up there at some point, then made that move over COVID-19 and thought, you know what? Now I know I can work remotely, I don’t have to move home. I don’t have to move back to Perth."
“There’s been a mental change – what would have been nice to do has all of a sudden become what can be done. The whole attitude towards working remotely has completely changed over this period.” Mr White said with vacancy rates currently so low, it was likely to be a challenging period – at least until the moratorium on rent increases was lifted next year. “Everyone has a housing need, and nothing is more important to them than the roof over their heads,” he said.
“No-one’s moving out, there’s no turnover, there’s no vacancies, putting more and more pressure on the few homes that are available. The rent increases are happening, but due to market distortions because of the government’s COVID-19 moratorium extension, no-one knows where the real rents actually are.” In terms of rental yields, Mr White echoed Mr Dunning in that the market would eventually rebalance itself. “This will settle down, the market will find a new equilibrium,” he said. “But sadly, I think we’re going to see a lot of students sleeping on grandma’s floor between February and June 30. “It’s going to be ugly and unavoidable. And we’re just going to have to suck it up and live through it."
If you are considering an investment in Broome we have some great units/ villas available that offer an affordable investment opportunity that you can view here. One in particular is offering a 6.5% return - is located close to town and is priced at only $265,000.
If it's land and a house you'd prefer giving you something to eventually come and utilise for 6 months of the year we also have some great homes currently available. Most currently rented with great returns and a handful available to buy with vacant possession. Click here to view our homes currently for sale.
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Source - The West Australian view here.