Eastern state first home buyers could avoid the affordability issues in their home cities by securing an investment property in Perth, according to Paul Curran, Principal of Raine & Horne Rockingham Beach.

“The challenge for first time buyers in Sydney, Melbourne and to a lesser extent Brisbane, who may have limited funds, is to identify those suburbs that are affordable yet have good long-term growth prospects and plenty of tenant appeal,” said Mr Curran.

“The trouble is that median house price in Sydney is around $1 million and around $830,000 in Melbourne . In contrast, the median price in my patch of Rockingham is just $425,000.”

“Therefore, buying an investment property in Perth could be a good strategy for young Sydney and Melbourne Millennials wrestling to buy into the real estate market.”

Moreover, owning an investment in Perth may not preclude some younger interstate buyers from applying for a first homeowners grant, according to Mr Curran. 

“For example, if you buy an investment property in Perth, this won’t affect your eligibility for the first home owners grant in Queensland ,” he said. 

The Federal Government’s decision in this month’s budget to put a curb on travel allowances for investors with interstate properties is a storm in a tea cup, according to Mr Curran.

“There’s no doubt that a small minority of interstate investors may have taken advantage of the travel tax loophole to visit Perth more regularly,” said Mr Curran.

“While the rental market in Perth has a few short-term challenges, the clear majority of our interstate owners have purchased properties in Rockingham to take advantage of the long-term growth and yield potential of our region, rather than to rack up tax deductible holidays. 

“They buy the investment and then select a professional property manager such as Raine & Horne Rockingham to manage the asset for them.”  

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As Perth market stabilises, where are the most affordable suburbs?

The Perth suburbs selling more quickly now than in 'boom' times