2 Jun 2017

The western suburbs have narrowly missed out on a gold medal in Perth’s first-quarter apartment sales race, coming second to the city, with experts saying it illustrates a compelling story of unmet demand.

Despite having only 12 “active projects”, that is projects being actively sold or already built, the western suburbs produced a “really solid quarter”, accounting for 55 of the 258 apartments sold across the Perth metropolitan area, Urbis director of property economics and research David Cresp said.

It is the highest number of western suburbs apartments sold since the second quarter of 2015. In the inner city, which has 27 active projects, 74 apartments sold in the March quarter, a big jump on the December quarter sales total of 48.


The western suburbs produced a “really solid quarter”, accounting for 55 of the 258 apartments sold across the Perth metropolitan area

There are a total of 134 active projects across Perth, so the inner city and western suburbs account for almost one-third of them.

Mr Cresp said 258 apartments worth about $167 million sold across Perth in the first quarter — up from 253 in the three months to December 31, despite a quieter residential housing market.

“The apartments in the western suburbs are being sold to local people,” Mr Cresp said, citing sales in TRG’s Empire West at Perry Lakes, Blackburne Property Group’s Aria in Swanbourne, Mirvac’s Latitude at Leighton beach and Mirvac’s Claremont on the Park The Grandstand and Reserve projects.

Overall apartment sales by value of $167 million for the three months to March 31 was roughly in line with the December quarter.

Mr Cresp said the overall residential market was “going to bottom this year” if it hadn’t already because there was a “fair bit of stock built up”.

However, in Perth, apartments represented only 20 per cent of all dwelling approvals, in contrast to Brisbane where apartments had fallen back from 50 per cent of all dwelling approvals to 40 per cent.

More worryingly, he said, in Perth, the three-year lead times between sale and construction made it harder to get the supply right.

“This year is going to be the peak level of supply,” Mr Cresp said.

“A lot of the apartments that have been built were sold off the plan. It’s getting harder overall to get projects out of the ground and there are fewer new projects this year.

“Real estate market confidence is a real problem because by 2020, in Perth, we will have an undersupply of apartments.”

Mr Cresp insisted the real issue was buyers not feeling confident that prices would hold up. That affected pre-sales, making it harder for developers to get financing for their projects.