Sales up as Perth apartment market holds strong

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Now in its third edition, the Urbis Perth Apartment Essentials report tracks developments of 25 or more apartments across the metropolitan area.

The Essentials report found local owner-occupiers accounted for 49 per cent of all sales in the June quarter, making them by far the biggest buyer group. WA investors made up 30 per cent, with interstate buyers accounting for only 5 per cent.

In contrast to the apartment sector in the eastern states, overseas investors made up only a small proportion of sales with just 10 per cent of apartments sold to foreign buyers.

Now in its third edition, the Urbis Perth Apartment Essentials report tracks developments of 25 or more apartments across the metropolitan area. The latest quarterly report monitored 137 apartment active projects – developments that have commenced pre-sales, are under construction or recently sold and have apartments still remaining for sale.

Another key finding from the June quarter report was the suburbanisation of Perth’s apartment market, with suburban developments – classified as those in areas outside the Urbis-Inner City and Fringe areas – outperforming those key precincts in terms of sales for the three months to June 30.

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What we have in Perth now is a maturing apartment market, supported by an increasing acceptance of higher density living and a growing diversity in terms of the product that’s on offer.

Suburban apartment developments, covering a broad range of locations including Innaloo, Cannington, Midland and outlying areas such as Wellard and Alkimos, accounted for 40 per cent of all sales for the quarter. Eight out of the ten best-selling projects were also in suburban locations.

What we have in Perth now is a maturing apartment market, supported by an increasing acceptance of higher density living and a growing diversity in terms of the product that’s on offer.

Although the Inner City and City Fringe precincts remain a focal point for high rise developments, low rise and more affordable apartment buildings increasingly dominate the landscape of several town and suburban centres. Suburban urban renewal projects, combined with the State Government’s focus on affordable higher-density housing and transport-oriented development, are set to significantly change Perth’s housing market.

Looking at the more traditional Inner City and Fringe apartment precincts, these areas were following the east coast trend of bigger developments.

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The big buildings are getting bigger.

The big buildings are getting bigger. Developments with more than 100 apartments used to be reasonably rare in Perth, and account for only one in ten of all existing developments of over 25 apartments – however, looking at currently active developments approximately one in four is over 100 apartments, and when we look at developments in the planning stage it’s one in three.

Finbar would soon be launching the largest apartment building that Perth had seen, with 294 apartments over 35 stories. However, even larger developments were now in the planning phase, with a 48-storey residential tower planned for the Kings Square site and a planned 52-storey tower with 350 apartments proposed for 30 Beaufort Street on the fringe of the CBD.

These buildings are still small-scale when compared to the eastern states – in Melbourne there are two buildings in pre-sales with over 1,000 apartments, and there’s also one development of that size in Brisbane..

Moving forward, 2015 will be an interesting year for the apartment market in Perth with the third quarter forecast to see 16 new projects, yielding approximately 1,670 new apartments, launched into the market, including Far East Consortium’s iconic Towers at Elizabeth Quay.

This will be a test of buyer appetite across the full spectrum of apartment product.