Subiaco WA Property Investment

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## 2. Market Overview - Median house price: $2,290,000 - Median unit price: $914,510 - 1‑yr price growth: 22.7% - 5‑yr CAGR: 4.0% per year - 3‑yr forecasted growth: 13.5%

Days on market is not supplied, so we cannot comment on how quickly listings are selling. The double‑digit 1‑yr growth and a 13.5% forecast over the next three years signal a seller‑biased market in the short term, but the underlying trend still offers attractive upside for buyers who can lock in today’s prices.

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## 3. Rental Market - Median weekly rent: $1,195 - Gross rental yield: 2.7%

Vacancy rate and demand rating are not provided. The 2.7% yield, derived from the median rent and median price, is modest, indicating that long‑term capital growth is the primary return driver rather than cash flow.

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## 4. Short‑Term Rental Opportunity No STR data (nightly rate, occupancy, or revenue) is supplied. With no evidence of a lucrative short‑term market, the default recommendation is to treat the property as a long‑term rental (LTR) investment.

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## 5. Infrastructure & Growth Drivers The data set does not list any specific projects, transport upgrades, or employment hubs. Subiaco’s proximity to Perth’s CBD (within 5 km) is a built‑in advantage, but we cannot quantify additional drivers from the supplied information.

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## 6. Bull Case If the 3‑year growth forecast of 13.5% materialises:

• Projected median house price: $2,290,000 × 1.135 ≈ $2,599,150
• Projected median unit price: $914,510 × 1.135 ≈ $1,037,460

That represents a capital gain of roughly $309,000 for a house and $123,000 for a unit over three years, assuming price appreciation follows the forecast and no major market headwinds emerge.

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## 7. Risks | Risk | Data‑backed indicator | Potential impact | |------|----------------------|------------------| | Yield pressure | Gross yield 2.7% | Small cash‑flow buffer; higher interest rates could turn the investment negative. | | Vacancy uncertainty | Vacancy rate not supplied | If vacancy rises above the norm, cash flow could deteriorate further. | | Supply pipeline | No data on new approvals | A surge in new units could dilute rents and push yields lower. | | Rate sensitivity | Yield 2.7% vs typical loan rates (~5‑6% in 2024) | Borrowing costs already exceed rental income, increasing reliance on capital growth. |

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## 8. The Play - Entry range: - Houses: $2,200,000 – $2,400,000 (around the $2,290,000 median) - Units: $850,000 – $950,000 (around the $914,510 median)

• Minimum yield target: Aim for a gross yield of ≥ 3.0% to provide a modest cash‑flow cushion above the current 2.7% level.

• Watch signals:

• Recommended strategy: Acquire a well‑located house or unit at the lower end of the entry range, hold for 3‑5 years, and rely on the projected 13.5% capital appreciation. Prioritise properties with scope for minor renovations that could lift rent above the median $1,195 wk, nudging the yield toward the 3% target. If future data reveals strong STR performance, reassess the model, but until then treat the asset as a long‑term rental.