I have actively worked with investment property in Perth for the last 5 years. In all of that time, I can say without reservation that I have never seen a better time to build an investment property in Perth.
Why? First of all, the supply of established properties for sale in Perth is at its tightest level at least five years, with only 8,500 properties currently on the market. In addition, titled land is becoming harder to find, with waiting times of as long as 2 to 6 months for titles in most quality land estates in Perth.
At this moment, building times in Perth are still relatively quick: 6 to 8 months for a villa, and up to 10 months for a house, including time for building approval. However, many builders are expecting a labour shortage by the end of the year. This will cause completion times to rise, and could cause a 5% rise in prices by mid 2013.
When you put all of these factors together, they point toward one obvious conclusion: if you are thinking of building an investment property in Perth, and you delay the decision as much as six months, it could cost you well into six figures over the course of a property loan. The best way to ensure it you can lock in today’s prices is to buy a new house and land package with a fixed building contract.
There are many advantages to investing in new rental property. You’re allowed high depreciation deductions, while the property usually brings a great rental return. In addition, a new house makes it easier to attract a quality tenant, and tenants usually take more pride in a new house and treat it as if it were their own. This results in less deterioration and a higher resale value when you’re ready to sell the property.