Some stand-out in patchy mar­ket

The West Australian - - PROPERTY - He­len Shield

Perth’s patchy apart­ment mar­ket is ex­pe­ri­enc­ing some out­stand­ing re­sults — but only where the alchemy of de­sign and lo­ca­tion are cast­ing a spell.

Ur­bis eco­nom­ics and mar­ket re­search di­rec­tor David Cresp said Perth’s top three apart­ment projects notched up sales of 33, 20 and 18 re­spec­tively in the third quar­ter.

De­spite this, Mr Cresp said even with strong pre-sales some de­vel­op­ers had found them­selves at the mercy of banks wary about apart­ments.

“Yes, it’s a tough mar­ket, but if you get the right prod­uct, there’s a mar­ket there,” Mr Cresp said, adding that at the end of the third quar­ter, Black­burne Prop­erty Group had sold 83 per cent of its Essence at Clare­mont on the Park. Mir­vac’s Lat­i­tude at Leighton Beach was also 83 per cent sold. Stir­ling Cap­i­tal’s Cirque in Ap­ple­cross was 80 per cent sold.

Burgess Raw­son di­rec­tor Chris Tonich, who is head of Burgess Raw­son’s WA res­i­den­tial oper­a­tions, said the tide was start­ing to turn for off-the­p­lan apart­ment sales, which had suf­fered the dou­ble whammy of slow­ing pop­u­la­tion growth and a bank fi­nance crack­down on in­vestors.

Anec­do­tally near-city projects with strong owner-oc­cu­pier ap­peal, par­tic­u­larly those with three-bed­rooms, were sell­ing well. Other projects with a high pro­por­tion of twobed­room apart­ments — the tra­di­tional sta­ple of apart­ment projects — were strug­gling with pre-sales.

How­ever, Mr Tonich said apart­ment in­vestors were start­ing to re-emerge with in­ter­est from as far away as Sydney and Mel­bourne, where buy­ers were likely to have to pay at least $750,000 for a twobed­room city-fringe apart­ment, com­pared with $500,000 in Perth.

“That’s not to sug­gest that they (young Sydney and Mel­bourne pro­fes­sion­als with trans­fer­able job skills) will be­come a sig­nif­i­cant pro­por­tion of the buyer mar­ket for Perth apart­ments but . . . it does show just how well the Perth mar­ket stacks up na­tion­ally,” he said, adding that Perth would likely ex­pe­ri­ence an un­der-sup­ply of apart­ments in a cou­ple of years.

Mr Tonich said Real Es­tate In­sti­tute of Aus­tralia data had found the me­dian unit price had tre­bled in all ma­jor cap­i­tal cities over the past two decades. In Perth in the past 20 years that rise had been greater than the rise in house prices.

An artist’s im­pres­sion of Cirque Apart­ments in Mount Pleas­ant.

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