Buying an investment property in Perth: is this a good idea in 2023?


If you’re an investor looking to grow your profits in 2023, the Perth rental market is overflowing with opportunities right now. 

Not only is there enormous demand for rental stock in Western Australia, but Perth is actually the most affordable Australian capital city for home buyers.

Before we dive into the benefits of buying an investment property in Perth, let’s take a quick look at the turbulent post-COVID conditions of the Australian property market to understand the bigger picture.

Australian property market conditions after the global pandemic

There’s no denying the Australian property market is facing some challenges as the supply of new houses fails to meet growing demand.

In other words, there’s a national housing shortage that requires more investment in the property sector. 

National market instability has been fuelled by a number of factors related to the COVID-19 pandemic, such as:

  • Consecutive interest rate hikes
  • Fluctuating house prices (peaked in May 2022, before dropping 9.1 per cent)
  • Construction supply chain problems and subsequent building delays
  • Rising construction costs
  • Immigration driving up housing demand after border closures ended

Hundreds of thousands of households now face financial pressure – whether that be rental or mortgage stress. 

These days, a couple on an average wage would need to allocate more than one third of their combined earnings towards loan repayments just to buy an entry-level home, according to a report by Domain.

It comes as little surprise that fewer first-home buyers are entering the national market (whether to reside in the house or turn it into an investment later on). Data from the Australian Bureau of Statistics showed a 3.5 per cent decline of first-home buyers in February.

In this current climate, many new investors may reconsider their plans to build or purchase a rental property; while seasoned investors might delay expanding their portfolio.

Thankfully, the national property market already shows promising signs of stabilising

At any rate, the Western Australia property market stands out as an attractive option for new and seasoned investors alike – especially the capital city Perth!

Let’s look at some of the reasons why buying an investment property in Perth is a good way to increase your ROI in 2023.

Three reasons why now is the perfect time to buy an investment property in Perth:

1. Tenant demand is high for Perth rental properties 

Firstly, there’s enormous tenant demand for rental properties in Perth and wider Western Australia. This makes it easier for landlords to find tenants. 

The rental vacancy rate in Perth is 0.6 per cent – the lowest it’s been in more than four decades.

Investors can look at the vacancy rate of a particular building or location to see how much demand there is from tenants for rental properties there.

The vacancy rate represents the percentage of units that are available (vacant) in a hotel or apartment building. A low vacancy rate indicates that most rental properties are already occupied (and highly sought after), which is the case in Perth. 

It’s a similar story in parts of regional Western Australia, especially in these locations: 

  • Kalgoorlie (0.5 per cent vacancy rate)
  • Albany (0.3 per cent vacancy rate)
  • Geraldton (1.5 per cent vacancy rate)
  • Bunbury (2.5 per cent vacancy rate)

In Western Australia, a balanced vacancy rate is typically 2.5 to 3.5 per cent, however we haven’t seen WA rates in that range since September 2019. 

This is largely because there isn’t enough rental stock available and demand far exceeds supply.

A recent report by the National Housing Finance and Investment Corporation predicts that Perth faces a shortage of 25,000 homes by 2026, which is the largest shortfall in any Australian city.

Cath Hart, CEO of the Real Estate Institute of Western Australia (REIWA), encourages investors to buy a property in WA to lease out to tenants, as there’s a strong need there.

We hope that investors look again at WA’s property market, given our affordability relative to other states and the huge demand for more rental stock,” she said.

And it seems that more investors are heeding this call. When it comes to total housing loans, the proportion of housing loans that went to investors rose from 18 to 28 per cent between 2019 and November 2022.

Data from REIWA reveals the Perth suburbs that attract the most interest from potential buyers, in terms of online searches. Wembley took out the top spot, at over 38,000 searches in the year to November 2022. 

Other popular suburbs include:

  • Scarborough: 34,602 searches
  • Subiaco: 33,009 searches
  • Mount Lawley: 31,836 searches
  • Duncraig: 30,688 searches
  • Wembley Downs  30,063 searches

2. Strong rental yields in the most affordable capital city for home buyers

Rental yields are strong for landlords in Western Australia, after the Perth property market underwent a massive shift during the global COVID-19 pandemic.

To give you an idea, Perth’s median house rent was sitting around $350 per week for several years before COVID, but then surged to $520 per week in December 2022.

Landlords also benefit from the fact that Perth is the cheapest Australian capital city for home buyers. The median house sale price of $525,000 is the lowest in the nation, according to a December 2021 report by the Real Estate Institute of Australia (REIA). 

For comparison, look at the median house sale price of other capital cities.

  • Adelaide: $600,000
  • Brisbane: $711,000
  • Hobart: $775,000
  • Canberra: $950,000
  • Melbourne: $1.125 million 
  • Sydney: $1.6 million

This means that mortgage payments are significantly lower in Western Australia. If we take the example of a median house, a buyer in Perth can expect to pay 58 per cent less than a buyer in Sydney, which is a huge difference. 

3. Strong economic growth in Western Australia

Western Australia has one of the fastest growing populations in the nation (for good reason), so we can expect the high demand for rental properties to continue.


Although the global economy is strained, Western Australia is expected to successfully weather the storm if a recession occurs. 

The Chamber of Commerce and Industry WA recently published a report that shows the state has a solid domestic economy that should grow by 3.5 per cent this financial year.

This isn’t surprising, considering that global credit rating agency S&P praised Western Australia as having the best economy in the world only two years ago – a massive achievement!


Interstate migration to Western Australia surged in recent years, as people are drawn to the abundance of opportunities here. Data from the ABS shows thousands of people moved interstate to Western Australia during the pandemic, which created a new record.

Premier Mark McGowan put this down to the state’s strong pandemic management: 

“During the pandemic, we made sure to provide opportunities for people from other States to relocate permanently to WA, to find employment in our strong jobs market and take advantage of housing affordability and terrific lifestyle,” Premier McGowan said.

Now that international borders have reopened, Western Australia is also preparing for an influx of immigrants who will need homes.

Thriving education and employment sectors:

The state government recently invested $13 million into Western Australia’s international education sector, to cater to growing interest from students around the world. 

This couldn’t come at a better time. 

Earlier this year, China declared that all students studying online with a foreign university must resume in-person learning. This has further increased demand for secure accommodation around Australia.

Finally, we’re experiencing a surge in employment growth, which should attract thousands of workers to the state. Growing sectors include agriculture, transport, retail, construction, tourism, and health. It also doesn’t hurt that Western Australia has the lowest unemployment rate in Australia! 

Orana helps property investors to grow in the Perth rental market 

Are you looking to maximise your profits by buying an investment property in Perth?

Orana Property has been helping residential and commercial investors to optimise the value of their assets, and we have more than 120 years of experience between us. 

We handle all the day-to-day responsibilities that come with looking after a property, so clients can focus on other priorities.

Our experienced team provides management services at a competitive price. We deliver a premium service, based on each client’s unique requirements.

Request a free call back or ring 1300 509 554 to find out more.