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Buyers needed to be particularly careful to assess the track record of developers to ensure what they were buying would be built.
“We were expecting a lot (of new apartment projects) to be launched in the fourth quarter — that’s not happening, everyone is holding off.”
Of those September-quarter sales, 102 were in the inner-city, down from 162 in the June quarter, and 146 a year ago, with the big fall off in sales playing out in outer suburban areas.
The plunge in overall apartment sales year-on-year was part illusion because of the substantial reduction in the number of new apartment projects being sold.
“It looks like it’s down but at that time (last year) we were seeing six or more launches per quarter … now we are seeing sales but with a very limited number of launches,” he said.
However, it was not just the apartment market that had slowed, he said, pointing out the established house market and the land market were also softer.
“We will need new supply,” he said, saying that by 2020 it was likely there would be an apartment shortage, because of the three-year lag between project launch and settlement.
“Even in a quiet market, more than 341 people bought apartments in the quarter,” he said.
“There’s very real demand. Is it getting tougher for developers? Absolutely. The good thing for consumers … is developments going ahead are well-designed and in the best locations.
“We think we are close to the bottom. It’s not a supply problem, we think buyers are holding off because the newspapers are telling them things are a lot worse than they really are.”
Mr Cresp singled out Blackburne Property Group’s award-winning Aria apartments in Swanbourne, as a “success story” because they were all sold soon after it was finished.
Mr Cresp said the reluctance to trot out new projects in response to fears of potential oversupply was healthy and some projects simply would not get the level of pre-sales needed to go ahead.
Buyers needed to be particularly careful, he said, to assess the track record of developers to ensure what they were buying would be built.
“It’s getting more difficult to get pre-sales and banks want more pre-sales (before they will finance) so the adjustment of the market is starting to kick in,” he said.
