KEY INSIGHTS
- Investor confidence is becoming a key driver of Perth's housing market, with policy changes influencing long-term investment decisions.
- Perth's strong fundamentals remain, but private investment will continue to shape future housing supply.
- As the rental market evolves, experienced property management is becoming more important in securing quality tenants.
For much of the past five years, Perth's property market has been defined by strong demand, limited supply and sustained price growth. But the next chapter may be shaped less by buyer demand and more by investor confidence.
Recent discussion surrounding the Federal Government's proposed changes to negative gearing and capital gains tax has shifted attention towards the role investors play in Australia's housing market. Under the proposed reforms, the capital gains tax discount on established investment properties would reduce from 50% to 25%, while negative gearing would no longer apply to future purchases of established homes. With around 15% of Australians owning an investment property, the proposed changes have the potential to influence investment decisions well beyond the eastern states.
The discussion also comes at a time when market activity is becoming more measured. Recent reporting highlighted a 23% decline in buyers and sellers coming to terms with the market compared with previous years, signalling that confidence and sentiment are becoming increasingly important drivers of market activity alongside traditional supply and demand fundamentals.
Investment confidence shapes tomorrow's housing supply
John Percudani, Founder and Managing Director of Realmark, believes the discussion around housing needs to move beyond short-term price movements and recognise the role investment confidence plays in supporting the broader housing market.
"Housing markets rely on confidence just as much as they rely on demand. Owner-occupiers create demand, but private investors provide much of the rental housing that supports a growing population. When confidence to invest changes, the impact isn't always immediate, but it does influence future housing supply. Perth's fundamentals remain strong, however creating an environment where people have the confidence to invest is an important part of ensuring the market continues to meet the needs of a growing state."
Investment decisions are rarely made in isolation. Policy certainty, taxation, interest rates and long-term economic confidence all influence whether people choose to invest in housing. While market conditions will continue to evolve, maintaining a healthy level of private investment remains an important part of supporting a diverse and resilient housing market.
Property management becomes more important as the market evolves
The rental market has also shifted from the exceptionally competitive conditions of recent years. According to Edward Brine, Director of Property Management at Realmark Urban, enquiry levels have become more selective and prospective tenants are taking additional time to make decisions, making the leasing process increasingly strategic.
"Finding the right tenant has become more important than simply finding a tenant. As the market evolves, property owners benefit from experienced property managers who understand pricing, presentation, marketing and tenant selection. Every leasing decision has long-term implications for an investment, so a proactive, hands-on approach is more valuable than ever."
In this environment, strong local knowledge, targeted marketing and careful tenant selection can make a significant difference to both vacancy periods and the long-term performance of an investment. Experienced, hands-on property management is becoming an increasingly important advantage, helping investors adapt their strategy and protect the long-term value of their asset.
Source: The Australian