A Glimpse into Investor Activity in Western Australia in 2023

In 2023, the property market saw a boost in investor activity, as per the latest lending data from the Australian Bureau of Statistics. New housing loans to investors climbed by 10.4% from 2022 and an impressive 37.3% from 2021, reaching a record high of 2,211 in November.

The uptick in investor engagement is encouraging, especially considering the substantial loss of rental properties in Western Australia post-COVID. However, despite the rise in investor loans, we haven't seen a corresponding increase in rental properties, leaving the rental market with a noticeable supply-demand imbalance.

While the lending figures didn't specify the locations of investors, reports suggest robust activity from Eastern States investors in 2023. Their interest is drawn by the perceived value in the Western Australia market, offering more affordable property prices and significant rent price growth, signaling potential for attractive yields.

In 2023, investors had a notable focus on construction, with a 21.0% increase in loans for land and a significant 52.7% rise in loans for building. This trend attracted interest from Eastern States investors, and builders and developers reported strong sales, promising to contribute to rental supply in the long term as these properties are completed.

On the flip side, despite the rise in investor loans, the total number of new owner-occupier loans saw a 12.2% decrease from 2022. Lending for building experienced a notable 20.5% decline, while lending for existing dwellings and loans for land also decreased by 11.9% and 10.9%, respectively. This decline in loans for building followed the end of State and Federal Government COVID building incentives, prompting a shift in focus towards the established homes market.

The average loan size for owner-occupiers increased by 3.5% to $509,275 by December 2023, compared to the national average of $624,383, which rose by 3.3% over the same period.

In the world of first home buyers, there was a 12.0% decrease in new loans to owner-occupier first home buyers, totaling 15,604 in 2023. Despite this decline, first home buyers still made up 35% of new owner-occupier loans. This representation aligns fairly well with pre-pandemic levels, with past trends indicating fluctuations in first home buyer activity tied to government incentives and interest rates.

Paulette Contessi 

Director / Licensee

CONTESSI PROPERTIES