The Perth suburbs racking up the biggest rental growth
Rental gains are being racked up all across Perth, and some suburbs are growing faster than others. REIWA reveals the top five suburbs where house and unit rents are rising fastest.
There are many factors to consider when choosing where to buy an investment property.
Given rental returns play such an important role in the overall return, property investors should consider where tenant demand is the strongest, where the strongest rental yields are and whether the suburb has tenant-friendly amenities or future developments that will ensure it remains highly sought after.
Perth’s median rent price has increased 16 per cent to $430 per week in the last 12 months. While it is helpful to have an overview of how a larger market is performing, drilling down to suburb-level can help investors fine-tune their strategies and make more financially sound decisions.
It’s also important to consider the house and unit sub-markets separately, as just because a suburb offers good returns for houses, that does not necessarily mean it will perform as well for units, and vice versa.
There are significantly more houses sold in Perth than units, with reiwa.com data showing 68 per cent of all properties sold during the year to September 2021 were houses, while 17 per cent were units. The remaining sales were vacant land.
However, in the rental market, the divide of houses and units is much closer, with reiwa.com data showing that during the 12 months to September, 57 per cent of all properties leased were houses, while 43 per cent were units.
To narrow down Perth’s top performing suburbs, REIWA has conducted analysis of the Greater Perth region to determine the top five suburbs for house rent growth and top five for unit rent growth in the year to September 2021.
Top five suburbs for median house rent growth
Mosman Park tops the list for houses, with its median house rent price growing 40 per cent to $1,050 per week during the year to September 2021. This represents an increase of $300 per week. Located 14 kilometres from the Perth CBD, Mosman Park is part of Perth’s affluent Western Suburbs and has a median house sale price of $1.617 million.
Yanchep is second on the list, with its median house rent price growing 36.4 per cent to $450 per week in the year to September 2021. This represents a $120 per week increase. Yanchep is located 55 kilometres north of Perth near the coast and has a median house sale price of $430,000.
Third on the list is South Yunderup, with its median house rent price increasing 34.4 per cent to $410 per week during the year to September 2021. This represents a $105 per week increase. South Yunderup is located 80 kilometres south of the Perth CBD near Mandurah and has a median house sale price of $548,000.
Embleton is next on the list, with its median house rent price growing 33.3 per cent to $400 per week in the year to September 2021. This represents a $100 per week increase. Embleton is conveniently located eight kilometres north of the Perth CBD and has a median house sale price of $555,000.
Bicton rounds out the top five, with its median house rent price growing 33.2 per cent to $613 per week in the year to September 2021. This represents a $153 per week increase. Bicton is an affluent suburb located 15 kilometres south-west of the Perth CBD and close to Fremantle. It has a median house sale price of $1.255 million.
Top five suburbs for median unit rent growth
Bicton tops the list for units and is the only suburb to appear on both lists. Its median unit rent increased 37.9 per cent to $400 per week in the year to September 2021, which represents a $110 per week increase. Bicton’s unit market is much more affordable than its housing market, with the median unit sale price in the area sitting at $445,000.
West Leederville is second on the list for units, with its median unit rent price increasing 37.7 per cent to $420 per week in the year to September 2021. This represents a $115 per week increase. West Leederville is a trendy inner-city suburb located 3.5 kilometres west of the Perth CBD and has a median unit sale price of $490,000.
Wembley is next on the list for units, with its median unit rent price increasing 31.1 per cent to $348 per week in the year to September 2021. This represents a $83 per week increase. Wembley is located five kilometres west of the Perth CBD and has a median unit sale price of $275,000 – which is the most affordable sale price on either list.
Carlisle is fourth on the list, with its median unit rent price growing 25.5 per cent to $455 in the year to September 2021. This represents a $93 per week increase. Carlisle is located eight kilometres east of the Perth CBD and has a median unit sale price of $432,000.
Claremont rounds out the top five for units, with its median unit rent price increasing 25.5 per cent to $480 per week in the year to September 2021. This represents a $98 per week increase. Claremont is located in the affluent Western Suburbs 8.5 kilometres from the Perth CBD. It has a median unit sale price of $660,000.
Whilst median rent price growth is an important market indicator for investors, it's worth keeping in mind that the composition of sales plays a pivotal role in determining a median. We would always recommend speaking to a local REIWA agent before acting on a suburb’s median growth rates alone.
Broadly, the outlook for the Perth property market is positive, with strong conditions expected to continue in 2022. It is also anticipated that once the Western Australian borders open, we will see an increase in net interstate and overseas migration which will ensure the demand for rental properties in Perth does not wane.
If you’re thinking about investing in the Perth property market, now is an opportune time to take advantage of WA’s affordable property prices, strong tenant demand and growing rents to start your portfolio or expand it.
