Saving for a deposit can feel daunting—especially with surging property values and day-to-day expenses. But if you already own property, there’s another path: tapping into your home equity. In Western Australia, this strategy is particularly compelling in today’s booming market.
WA Property Market Highlights (2025)
- Perth leads the nation in growth: Metro house prices jumped by around 17.1% year-on-year, with many suburbs entering the million-dollar club
- Strong rental demand: Perth’s average runtime on the market dropped, while yields climbed to around 4.4%, with rents rising about 6.4% annually
- Regional WA is even hotter: Areas like Geraldton, Bunbury, and Broome are delivering over 20% annual capital growth in some cases
- Growth is expected to continue, with forecast gains of 5–10% in 2025, supported by limited supply, strong migration, and infrastructure investment
This performance makes WA—particularly Perth and its regional centres—an appealing landscape for investors using equity to expand.
What Is Equity—and How Can You Use It?
Equity is simply the difference between your property’s current market value and what you owe on it.
Example:
- Property valued at $800,000
- Loan balance is $480,000
- Total equity = $320,000
- Lenders typically let you borrow up to 80% of the value without paying LMI (that’s $640,000)
- Minus your loan, usable equity = $160,000
This usable equity can then be put toward a deposit on an investment property.
How Much Equity Do You Need for Another Property?
You’d typically need around 20% of the new property’s purchase price for a deposit, plus extra for stamp duty, legal fees, inspections, etc. For a $550,000 investment, that’s approximately $110,000, plus additional costs—which your usable equity might just cover.
Step-by-Step: Using Your Home Equity Wisely
Here’s how finance brokers typically walk clients through the process:
- Confirm usable equity
You’ll get a formal valuation through your lender to ensure accuracy. - Assess borrowing capacity
Your finances—and potential rate hikes or rental fluctuations—are stress-tested to ensure repayments stay manageable. - Structure loans ‘tax-smart’
Your home loan stays non-deductible while the investment loan remains potentially tax-deductible. Avoid cross-collateralisation where possible to keep flexibility. - Coordinate with your accountant
This ensures your borrowing plan aligns with tax strategies and overall financial position.
WA Market-Specific Investor Tips
- Act with confidence: Stock is tight and demand in Perth and regions is high. Using equity now puts you ahead of the curve.
- Focus on yield hotspots: Regions like Bunbury and Geraldton are outperforming; rental returns and capital growth are attractive
- Mitigate risk through diversification: If Perth values plateau, strong regional areas may continue delivering solid returns.
- Proactive valuation: With rapid growth, getting an updated valuation ensures your equity calculation reflects true market value.
- Watch for election and rate shifts: Forecasted WA growth depends on stability—market sentiment may shift around policy changes
Risks and How to Mitigate Them
Building your portfolio through equity can be powerful—but deliberate:
- Over-leveraging can stretch your finances too thin. Keep buffers for rates, maintenance, and rental vacuums.
- Market shifts may cool growth—especially post-peak in some hotspots
- Interest rate changes can reduce borrowing capacity. Always project for future rate rises.
- Cross-collateral entanglement can complicate refinancing or selling later.
What If Equity Isn’t Yet Enough?
Here’s what you can still do:
- Accelerate equity: Make extra repayments or renovate to increase your property’s value.
- Restructure loans: Refinancing might improve serviceability and free more equity.
- Plan ahead: Build your position over 6–12 months to prepare for a strategic investment.
Conclusion
With Western Australia’s property market among the strongest in 2025—especially in Perth and key regional centres—using equity from your home isn’t just practical; it’s strategic. If managed carefully, this leverage can unlock significant investment returns, while also preparing you for long-term portfolio growth. Stay informed, act decisively, and lean on expert support to navigate the path ahead.
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How can we help?
If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.
General Advice Warning
The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.
Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.
Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.
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