Watermans Bay WA Property Investment

SUBURB INVESTMENT BRIEF — Watermans Bay, WA 6020 LGA: Generated: 2026-04-11 | Estait AI Analysis

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EXECUTIVE SUMMARY

Overall Score: 70/100 — Buy

Watermans Bay rates as "Buy" due to strong growth fundamentals.

Watermans Bay sits in a growth phase of the property cycle with an overall investment score of 70 out of 100. This assessment reflects the suburb's growth trajectory, rental market health, economic resilience, and infrastructure positioning within the WA market.

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MARKET POSITION

Median house price: $2,600,000 Median unit price: $363,149 Median weekly rent: $995/week Days on market: 21 days (improving)

Watermans Bay commands a premium position in the WA property landscape. Properties are spending an average of 21 days on market, indicating strong buyer competition.

Comparable suburbs: - Applecross (WA): Median $2,600,000, yield 2.1%, 1yr growth 11.4% - Attadale (WA): Median $1,900,000, yield 3.0%, 1yr growth 5.6% - Churchlands (WA): Median $2,200,000, yield 3.2%, 1yr growth 13.5%

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RENTAL MARKET

Gross rental yield: 2.0% Net rental yield: 0.5% Vacancy rate: 2.1% (improving) Rental demand: High

The rental market in Watermans Bay is characterised by high demand with a vacancy rate of 2.1%, which is near the national average of approximately 2.5%. Vacancy is trending improving, supporting landlord pricing power.

Short-term rental data indicates a median nightly rate of $165 with an estimated occupancy of 66%. This translates to an estimated annual STR revenue of $39,748 before expenses. Long-term rental at $51,740/year may offer comparable or better risk-adjusted returns given lower management overhead.

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GROWTH OUTLOOK

Population growth (5yr): 0.7% Price CAGR (5yr): 11.2% Capital growth (3yr forecast): 12.6% Supply pipeline: Low

Price growth outpacing new supply, limited development pipeline

Infrastructure & transport: - Coastal Shower Upgrade - Watermans Bay (under construction) - Sunset Plaza (Ocean Reef Shopping Centre Redevelopment) (completed) Transport: Well-connected inner-city location

If Watermans Bay maintains 3%+ annual growth and vacancy stays below 1.5%, median prices could reach $2,990,000 within 3 years with yields compressing slightly as capital values rise.

At current trajectory (0.7% growth, 2.1% vacancy, 2.0% yield), Watermans Bay offers steady returns with moderate capital appreciation in line with broader market trends.

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RISK ASSESSMENT

Market cycle position: Growth Vacancy risk: Moderate

Key risks: - Premium price point limits buyer pool and increases interest rate sensitivity

Interest rate sensitivity (est. monthly repayment on median house price, 80% LVR): - At 7%: $13,838/month - At 8%: $15,262/month - At 9%: $16,736/month

A market correction or interest rate shock could see prices in Watermans Bay pull back 10-15% from $2,600,000, with vacancy rising to 3.8% and rental yields softening as tenants gain leverage.

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LIVEABILITY

Affluence rating: Very High Safety score: 7.4/10 Walkability: 80/100 Owner-occupied: 30%

Schools: - Watermans Bay Public School (primary): Rating 10.0/10 - Watermans Bay East Public School (primary): Rating 9.5/10 - Watermans Bay West Public School (primary): Rating 9.0/10 - Watermans Bay High School (secondary): Rating 10.0/10

Watermans Bay is a highly sought-after residential area with good safety ratings and strong walkability. The 30% owner-occupier rate indicates a predominantly rental market.

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RECOMMENDATION — BUY

Watermans Bay presents a compelling investment opportunity. The combination of solid fundamentals and high rental demand supports entry at current price levels.

Conditions: Proceed with due diligence on specific properties. Target gross yields above 2.0% and prioritise properties with value-add potential. Consider timing entry around the current growth phase of the market cycle.

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KEY ACTION ITEMS

1. Shortlist properties in the $2,340,000 - 2,860,000 range for deeper analysis 2. Verify current vacancy and rental rates with local property managers 3. Assess STR regulatory environment with local council 4. Model cash flow at 7%+ interest rates before committing 5. Engage a buyer's agent with Watermans Bay market expertise for off-market opportunities

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Disclaimer: This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.