Villas, townhouses, units, apartments: which is the best investment in Perth?
The unit market in Perth offers a diverse range of benefits and downsides for investors, with some property types delivering higher rental yields while others offer superior amenities and features.
For investors looking for rent price growth and yield, units as a collective group of property types generally outperform houses.
| Year to March 2024 | Year to March 2023 | Year to March 2019 | ||||
|---|---|---|---|---|---|---|
| Property type | Houses | Units | Houses | Units | Houses | Units |
| Median sale price | $625,000 | $425,000 | $550,000 | $400,000 | $497,000 | $393,000 |
| Median rent price | $600 | $550 | $520 | $450 | $360 | $325 |
| Yield | 5.0% | 6.7% | 4.9% | 5.9% | 3.8% | 4.3% |
However, the unit market can be broken down into four main types: villas, townhouses, units and apartments (see definitions of property types here) and the returns vary across the categories.
This month we’ve looked at which unit types currently offer the best investment potential in Perth.
Rent price growth
When it comes to rent prices, villas recorded the strongest growth over the year to start of April 2024, rising 22.2 per cent to $550 per week.
Over the longer term, units slightly outperformed villas, but both were significantly higher than townhouses and apartments.
Median weekly rent
| Property type | Year to March 2024 | Year to March 2023 | Year to March 2019 | 1-year change | 5-year change |
|---|---|---|---|---|---|
| Apartment | $560 | $475 | $350 | 17.9% | 60.0% |
| Unit | $450 | $380 | $260 | 18.4% | 73.1% |
| Townhouse | $650 | $550 | $400 | 18.2% | 62.5% |
| Villa | $550 | $450 | $320 | 22.2% | 71.9% |
| Unit market | $550 | $450 | $325 | 22.2% | 69.2% |
Days on market
The unit market has seen its median leasing time tighten marginally in the past year, dropping from 15 to 14 days.
Villas were the fastest leasing unit type in both 2024 (13 days) and 2023 (14 days).
You can see the effect demand is having on the market when you look back to leasing days recorded during Perth’s extended downturn.
In March 2019, units as a whole leased in a median of 35 days, 21 days longer than we’re seeing now. Townhouses were the top performer then, leasing in a median of 33 days.
Median time to lease (days)
| Property type | Year to March 2024 | Year to March 2023 | Year to March 2019 | 1-year change | 5-year change |
|---|---|---|---|---|---|
| Apartment | 15 | 16 | 35 | -1 | -20 |
| Unit | 14 | 15 | 36 | -1 | -22 |
| Townhouse | 15 | 16 | 33 | -1 | -18 |
| Villa | 13 | 14 | 36 | -1 | -23 |
| Unit market | 14 | 15 | 35 | -1 | -21 |
Rental yields
When we look within the unit market, villas are currently the top performer with a yield of 6.6 per cent. They also provided the highest yield in 2023 and 2019.
| Apartment | Unit | Townhouse | Villa | |
|---|---|---|---|---|
| Yield March 2024 | ||||
| Annual median sale price | $510,000 | $380,000 | $600,000 | $435,000 |
| Rent | $560 | $450 | $650 | $550 |
| Yield | 5.7% | 6.2% | 5.6% | 6.6% |
| Yield March 2023 | ||||
| Annual median sale price | $499,000 | $360,000 | $565,000 | $380,000 |
| Rent | $475 | $380 | $550 | $450 |
| Yield | 4.9% | 5.5% | 5.1% | 6.2% |
| Yield March 2019 | ||||
| Annual median sale price | $515,000 | $335,000 | $520,000 | $338,000 |
| Median rent price | $350 | $260 | $400 | $320 |
| Yield | 3.5% | 4.0% | 4.0% | 4.9% |
We have previously broken down the unit market for sales, and villas were the top performer for median sale price growth – their prices are currently at their peak - and days on market.
Historically Perth has had a love affair with houses, tending to like their own patch of land, however, competition for houses is high and prices are rising strongly.
Villas are a more affordable option for home buyers and usually provide that ‘land’ in the form of private courtyards.
They also usually have their own garage/carport, rather than the central parking you find in apartments and some unit complexes. This convenient feature also appeals to buyers.
The features that attract home buyers are transferrable to the rental market, with many tenants potentially seeking to have their own piece of private ‘land’ where possible.
The data suggests villas are a good opportunity for investors. While the demand for these homes is there, villas make up a fairly small proportion of leases and also sales, indicating there is a need to build more of this type of medium-density housing in Perth.
This is general information and should only be used as a guide. Investors should do their own research as outcomes can vary from suburb to suburb.
