Eastern states seeing ‘seismic shift’ of investor focus

The latest Property Sentiment Report for 2Q24 released by Australian Property Investor (API) has found that the “love affair” with the Western Australian property market has begun to peter out as investors shift their interest over to the eastern states.

Prior to the final months of the financial year, the Western Australian property market drove prices throughout its capital and regional markets to record levels.

The report said that Perth benefited from relative affordability, high rental yields, and a strong economy, as the median Perth house sale price sits at $665,000 for the year to June 2024.

“The adage that all good things must come to an end appears to be driving property investor sentiment (although whether these price hikes are ‘good’ is very much a matter of perspective or predicament),” the report said.

During the quarter, Queensland kept its top spot for investor priorities in terms of offering the best investment prospects, up from 32 per cent to 33 per cent.

Meanwhile, sentiment towards Western Australia has nosedived, with 25 per cent fewer respondents identifying it as having the best investment prospects, now sitting at 16 per cent.

According to the report, this decline has marked one of the largest shifts in sentiment since API began polling its readership.

API said that while Perth is showing no signs of immediate slowdown, an exodus of investors may have a significant impact on the market.

“An apparent sense that the state has run its race has seen New South Wales emerge as the main beneficiary of this huge shift in sentiment,” the report said.

Indeed, NSW saw an increase to 26 per cent from 20 per cent on the previous corresponding period, with the report speculating that the higher rating may be a “harbinger of another burst of growth in Sydney and its regions”.

The month of June once again saw investor lending outpace owner-occupier lending, according to the latest Lending Indicators data released by the Australian Bureau of Statistics (ABS).

For total housing, the value of new loan commitments increased by 1.3 per cent to $29.2 billion, with investor lending rising by 2.7 per cent, contributing $11 billion to the total.

ABS head of finance statistics Mish Tan said that the total value of new investor loans was 30.2 per cent higher when compared to the same period last year, while for owner-occupiers, this figure was 13.2 per cent.

“Over the past 12 months, NSW continued to have the highest average loan sizes for both owner-occupiers and investors. In June, it rose to $780,000 for owner-occupiers and $818,000 for investors,” Tan said.

[RELATED: Investor lending continues to outperform owner-occupiers]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.