Great conditions for apartment Buyers
An oversupply of apartments in the Perth market means plenty of choice for buyers, and plenty of bargains to be had, according to industry experts.
REIWA president Hayden Groves said the current market for apartments was not as bleak as some people believed, particularly in prime locations.
“Off-the-plan pre-sales of Elizabeth Quay apartments went extremely well, with people paying $10,000sqm for an apartment, and projects in Swanbourne and South Perth have also done well,” Mr Groves said.
“I can’t see any significant change in the market in the next six months and transaction levels will remain quite low.
“Overall, there won’t be a lot of downward pressure on prices, because this low-inflationary, low-interest-rate environment has kept a floor under prices falling any further.
“I’m a little surprised prices haven’t fallen back more, considering job insecurity, transaction levels and our population growth slowdown.”
Property analyst and commentator Gavin Hegney believes the supply of apartments is contributing to an oversupply of all property in Perth, given reduced demand.
Changes to the firsthomebuyer’s grant, a fall in population growth, artificial demand created by the length of time to complete apartment
projects and the end of the mining boom all had an impact, Mr Hegney said.
He remained relatively optimistic about the local market— particularly compared with apartment markets in Melbourne, Sydney and Brisbane, which he said were behind Perth in the market cycle.
Psaros chief executive Danny Psaros said conditions were probably the best in a generation for buyers to negotiate a great deal on A-grade apartments.
“Property is inherently cyclical and this is one of the natural lows in the cycle, brought about by challenging economic conditions and slower population and employment growth,” Mr Psaros said.
“We feel this is the bottom of the market and supply will start to contract from here as buyers take advantage of affordability.
“Building completions far outstrip commencements — a leading indicator of cyclical recovery.”
QUBE Property Group managing director Mark Hector said Perth buyers were in a prime position to secure bigger, completed apartments for a lower cost.
Strong supply of apartments and a push by developers to provide greater options in size, amenity, finish and location led to current conditions, he said.
“Supply in boutique-sized developments is reducing, adding weight to the argument that a buyers’ market never lasts long,” Mr Hector said.
Draft design guidelines are a positive
The WA Housing Industry Association has welcomed the State Government’s release of draft design guidelines for apartment buildings.
HIA executive director John Gelavis said the draft guidelines and policies were a good first step in improving community perception of apartment
buildings in Perth.
“Apartment living in WA is not as common as in other States but apartments offer a great housing option for many, whether as renters or buyers,” Mr Gelavis said.
Ensuring apartment builders and designers had a clear set of guidelines could reduce the potential for conflict with local councils and the community when builders sought approval, he said.
The HIA would review the draft guidelines and policies and respond as part of the public consultation period, he said.