Perth apartment market picks up pace

In contrast to the previous quarter where 38% of total sales were in recently built apartments, this quarter 34% of sales (120 sales) were in presales projects.

David Cresp, Director of Property Economics and Research, said, “Considering only 16% of actively selling apartments in Perth is in a presales stage, the success these new projects are having in the market shows there is a demand out there for new developments.” 

According to Urbis research, 48% of sales were to owner-occupiers over Q4, remaining at a similar level of 53% in the previous quarter. A further 32% of sales were to local state investors. Mr Cresp highlighted, “Local sentiment towards the apartment market remained positive. This is expected to continue into 2018.”

Eight projects launched this quarter yielding 524 apartments, compared to 163 apartments across three developments in the previous quarter. But there is more to come with 17 projects anticipated to launch in the first half of 2018.

Apartment development approvals lifted slightly in the quarter, however – when compared to the peak experienced in 2014-2015 – levels remained at a low.

Mr Cresp explained, “Though Perth apartment supply reached a record level in 2017, apartments still only account for less than 20% of all dwelling approvals.”

Mr Cresp concluded, “The Perth established market is already starting to see a recovery after the longest market downturn in more recent history. This will start to flow through to the apartment market as confidence improves and completed stock levels reduce.”

• 348 sales were recorded in the December 2017 quarter, 34% of these were in presales projects.
• The Inner City precinct recorded the majority of sales at 101 sales, followed by the Western suburbs (54 sales), Fringe-East (48 sales), Southern Coastal (41 sales), Fringe-South (33 sales), Other precinct (30 sales), Fringe-North West (24 sales), Outer Southern (11 sales), and Southern (6 sales).
• The weighted average sales price for the December 2017 quarter was $696,695.
• Two-bedroom two-bathroom product made up the majority of sales at 47% of total sales, compared to 60% in the previous quarter. One-bedroom, one-bathroom, once-car product made up 27% of total sales.
• Owner-occupier sales dominated the market with 48% of transactions, followed by local state investors which made up 32% of transactions.