Investors flock to regional Western Australia

The southwest regional centres outpaced all other regional Western Australian property markets in the June 2024 quarter, according to new data from REIWA.

Busselton led the way with its median house sale price rising 6.0 per cent to $795,000, up from $750,000 in the March quarter.

It was followed by Bunbury, which saw a 5.5 per cent increase in its median house sale price to $517,000.

Annually, the placings were reversed. Bunbury recorded the highest growth, with the median house sale price rising 19.6 per cent, followed by Busselton at 16.9 per cent.

REIWA President Joe White said the battle for top position between Busselton and Bunbury had been ongoing since the September 2023 quarter.

“Both regional centres have been performing exceptionally well, with strong demand and limited new supply continuing to drive prices higher,” he said.

“The southwest’s proximity to Perth, along with easy access for FIFO workers and east coast travellers via the Busselton-Margaret River Airport, adds to its allure, particularly for those seeking a sea change without sacrificing accessibility.”

Mr White said while market activity tended to slow during the winter months, several segments of the Busselton and Bunbury markets remained active.

“Our members in Busselton and Bunbury report properties priced between $600,000 and $800,000 saw the most activity over the quarter, with investors and first-home buyers still driving activity in this segment of the market,” he said.

“Houses in this price bracket continue to sell quickly, as buyers look for value for money.

“As the spring selling season approaches, REIWA members expect more listings to come onto the market, providing additional opportunities for buyers.”

Mr White said investor activity remained strong across the regions, with investors drawn by the potential for strong rental yields.

“Our members say investor activity remains robust in many regional centres, with some agencies reporting up to 50 per cent of their sales are to investors,” he said.

“Investors aren’t just coming from the eastern states. Busselton, Esperance and Port Hedland in particular, have also seen an increase in purchasers from Perth.

“These buyers may be seeking holiday homes they can rent out for most of the year and use seasonally, or they’re looking for stable rental income, especially in the northwest where mining companies are leasing properties for at least two years.

“While Albany is also seeing investor activity, local owner-occupiers are outpacing investors, who often can’t act as quickly when a property becomes available.”

Seven of the nine regional centres recorded increases in their median house sale price over the quarter, while Esperance and Karratha remained stable.

Regional WA rental market

In the rental market, four regional centres recorded an increase in their median weekly rent over the quarter. Two remained unchanged and three declined.

Esperance saw the most growth, with its median weekly rent increasing 44.7 per cent to $550. It was also the top performer over the year, with its median weekly rent increasing 29.4 per cent.

Mr White said the significant rent price growth in the Esperance area was fuelled by a lack of available properties.

“Over the past year only a small number of properties have become available for rent and there is strong competition for these, which has driven the median price up over the year,” he said.

“Looking at the June quarter specifically, many of the properties that were leased were at the higher end of the market, which resulted in the large increase in the median when compared to the previous quarter.

“Unfortunately, with the few available properties concentrated in the upper end of the market, finding an affordable property is becoming less achievable for many prospective tenants.”

Mr White said the low supply of rental properties in the Esperance regional centre had created a range of issues.

“The market is extremely competitive and our members report for every rental property available, they’re receiving numerous applications. Not only is this stressful for the people that are unsuccessful, but it also creates a difficult situation for property managers who are having to turn away many good applicants,” he said.

“Then there is the effect on local business. A significant portion of prospective tenants are moving to Esperance from outside the region for job opportunities.

“If they are unable to find accommodation, this will further exacerbate the worker shortage we’ve previously heard from our members.”

“In some cases, tenants are turning to the sales market where feasible, simply because there aren’t enough rental properties available. This, in turn, is increasing pressure on house prices.”

Mr White said several other regions were also seeing tenants purchase properties to avoid the challenges of tight rental markets.

“In Albany, Broome and Karratha, we’re also hearing reports of tenants moving away from the rental market,” he said.

“For many, purchasing a property offers more stability, however, with properties towards the lower end of the market in high demand, it’s becoming increasingly competitive for those looking to escape the rental roundabout.”

All regions recorded an increase in their weekly median rent price over the year.