Downsizers underwrite Perth apartment resilience

Owner-occupiers, particularly downsizers, are driving Perth apartment sales, with 339 apartments worth $214 million sold in the second quarter.

Urbis director David Cresp said despite Perth’s overall slower residential market, the apartment sector appeared resilient with second-quarter sales slightly lower than for the same quarter a year ago (348) but well above the 307 quarterly average for last year.

The latest Urbis Apartment Essentials survey revealed 67 per cent of second-quarter buyers were owner-occupiers, up from 65 per cent last quarter, which was also a record. “This is the highest proportion of owner-occupiers we have recorded since the survey started in 2014,” Mr Cresp said.

The top-selling projects, including The Towers at Elizabeth Quay, Aston238 in Leederville, Aire in West Perth and The Beach Shack in Scarborough were being bought up by downsizers. Almost half of the sales were for apartments Urbis deemed “luxury”.“Perth buyers really are spoilt for choice with a range of apartments in new developments available across Perth,” Mr Cresp said. “However, as the property market improves, the number of options … will decrease.”

Despite challenges for apartment developers, Mr Cresp said well-targeted developments were performing well. For example, he said, Aston238, at 238 Oxford Street Leederville, launched and sold 64 per cent of the 58 apartments in the second quarter. “Works are now starting on the site,” he said. “To get enough sales to start works in one quarter is very unusual in this market but shows there is demand.”

Mr Cresp said from 2014 to 2016 off-the-plan sales accounted for 60 per cent of new apartment sales. In the second quarter off-the-plan sales accounted for 39 per cent of sales (worth $83 million); 33 per cent were in completed buildings and 28 per cent were under construction.

Last year, 2937 apartments were finished in Perth. About 1400 are expected this year.

“Conditions are starting to make it more challenging for developers to make new developments viable,” Mr Cresp said.

Falling Perth housing prices, slower sales and competition from newly completed developments were reducing supply.

Only 507 new apartments were approved for the quarter, in line with recent approval levels, but below levels of 2014 and 2015 when 4850 and 7190 were approved respectively.

Source: The West Australian