According to the latest Urbis Apartment Essentials survey, owner occupiers were once again the key drivers, making up 65% of buyers for the Perth apartment market,
David Cresp, Director Property Economics and Research, said, “This is the highest proportion of owner occupiers that we have recorded since the survey started in 2014.”
The calibre of sales throughout the quarter highlighted that many buyers were downsizers, with almost 50% of the sales in buildings ranked as high end or luxury in the survey. Top selling projects included The Towers at Elizabeth Quays, Aston238 in Leederville, Aire in West Perth and The Beach Shack in Scarborough.
Mr Cresp said, “Whilst the market for apartment developers remains to be challenging, well-targeted developments continue to perform. Aston238 in Leederville was a prime example this quarter, launching at the start of Q2 and selling 64% of apartments in this first quarter of sales. This has meant that the works are now starting on the site. To get enough sales to start works in one quarter is very unusual in the current market but shows that there is certainly still demand for well targeted projects.”
The figures really highlighted the change in the market over the last three years. Whilst from 2014 to 2016 the focus was on off the plan sales, which were accounting for around 60% of new apartment sales during this period, the focus has now switched to sales of apartments in completed buildings, accounting for 33% of sales this quarter.
Sales in projects that were under construction accounted for a further 28% of sales and many of these buildings are nearing completion. However, there was still demand for new projects that delivered on what buyers are looking for, with off the plan sales rising to 39% of all sales during the period and accounting for $83 million in sales.
Mr Cresp said, “Perth buyers are currently spoilt for choice with a range of apartments in new developments available across Perth. However, as the property market improves, the number of options and good buying opportunities will decrease for buyers and now is certainly the time to make the most of a buyers’ market. These conditions won’t last.”
After record supply in 2017, completions of new apartments this year is expected to see a significant fall with approximately 1,400 apartments being completed this year compared to 2,937 in 2017.
Mr Cresp said, “Current conditions are starting to make it more challenging for developers to make new development viable. The overall fall in Perth housing prices together with slower sales rates and competition from newly completed development meant that we are seeing a drop off in new supply. This was reflected in approvals for the quarter with only 507 new apartments approved for the quarter. This was in line with levels over the last 18 months, but well below levels seen from 2014 to 2015 when we saw 4,850 and 7,190 apartments approved per annum respectively.”