IMO, Perth yields are hardly what one would label compelling. Inner city apartments may yield 5% grossed up, out in the burbs you'll have to settle for a lot less.
Borrow at 10%, yield 5% with no growth doesn't strike me as an attractive investment. Without growth, you're just burdening yourself unnecessarily, especially with ING giving you 8% for a term deposit, risk-free.
Longterm, rising rents face the same problem as inflated house prices - affordability. I concede that rental yields will continue to rise in Perth, but not enough to offset stagnate house prices.
As usual, the caveat is that select individual properties will perform well. Good luck in finding one.
