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Western Australia’s property market is drawing significant attention from investors, with a 37% annual surge in investor loans, according to data from Money.com.au. This sharp increase is more than three times the national average growth of 11%, positioning WA as a key focal point in the Australian property landscape.
This sharp rise comes as Perth continues to attract substantial interest from investors, with house prices in the capital city climbing by 23.8% year-on-year. Meanwhile, regional areas like Dardanup and Withers have experienced even higher increases, with property values rising 26.6% and 25.2%, respectively.
Money.com.au data expert Peter Drennan (pictured) highlighted the broader trend of increasing investor activity across Australia, with investor loans now accounting for 38% of new loans issued, a rise from 22% in 2020.
“WA is the golden goose, with the number of investor loans in the state rising by 37% annually. This investor interest is fueled by five key factors: the state’s growing population, increasing property values, strong rental demand, low vacancy rates, and the resources boom in the region,” Drennan said.
However, there are signs that WA’s market might be nearing its peak. Mansour Soltani, a home loans expert at Money.com.au, noted that the lack of supply in WA is now pushing investors to consider opportunities in Victoria and South Australia, where property prices are more attractive.
“WA has seen solid growth in investor lending in the last five years, but property prices in the state are now higher than investors may be willing to pay for. It’s an inflated market, and the bubble will eventually burst," Soltani said.
While WA leads in investor loan growth, other states are also seeing varying degrees of increase. Investor loans are up 13% annually in New South Wales and Queensland, and 7% in South Australia. In contrast, the Australian Capital Territory and Tasmania have experienced annual decreases of 5% and 3%, respectively.
The average investor loan in WA is now $454,000, reflecting a 9% increase over the past year. In comparison, New South Wales has an average investor loan of $749,000, up 6%, while Queensland’s average loan stands at $520,000, also showing a 9% increase.
Additional insights from Money.com.au reveal that while the national value of investor loans has decreased by 7% since peaking at $127 billion in June 2022, WA has seen its loan value soar from $7.8 billion in June 2022 to $11.8 billion, marking a 54% increase above the previous peak.
Moreover, construction loans in the owner-occupied sector have declined, but investor-related construction loans have risen by 23% annually. First-home buyers using investor loans have also shown a significant 20% growth rate over the past year.
