It’s a high rise in apartments
The surge in building activity in Perth’s apartment sector will deliver 3500 apartments by mid-2016 but developers are amassing a much bigger pipeline as apartments gain traction in Perth’s real estate market.
According to a survey of the apartment market by property consultancy Y Research, the 3500 apartments will come from 66 projects under construction but there are another 9189 apartments in the planning pipeline, where development approvals have been received or are pending for 113 apartment sites.
The Y Research survey, which tracked projects from Waikiki in the south to Mindarie in the north and Ellenbrook to the east, found that 932 apartments would be added to Perth’s residential market in the next six months.
The suburban locations for most of the apartment developments are Perth CBD, Subiaco, Burswood, Northbridge and East Perth but the biggest development hot spot is Rivervale, the home of LandCorp’s 14ha Springs Rivervale infill project.
Y Research principal Damian Stone said the wave of development had been heavily influenced by limited construction after the GFC, strong population growth and low interest rates.
“This round of development does represent the beginnings of a structural shift in Perth’s housing supply, ” he said.
“Perth is evolving as a city and in the future, a higher structural component of housing supply will come from apartment developments. More than 20,000 apartments have been identified as a potential supply over the next decade and demand for apartment living will likely result in apartments making up at least 15 per cent of all dwelling construction by the end of the decade.”
Of the 66 apartment projects under construction, 21 projects report that all their apartments have been sold in off-the-plan deals and most projects are reporting more than 80 per cent of their apartments have been sold.
Y Research found the smaller scale of many of the projects had allowed a range of developers to enter the market, with listed companies, 22.1 per cent, private companies, 31.2 per cent, syndicated developers, 28.1 per cent and builder-developers 18.5 per cent.
Mr Stone said more than 60 per cent of apartments under construction were in mid-rise developments of between five and eight storeys but in coming years, there would be a shift to bigger, high-rise developments.
“Developers have shifted their focus from luxury to affordability, from two and three-bedroom projects to one and two-bedroom projects and from first-homebuyers and owner-occupiers to investors, with an increasing proportion for foreign investors, ” he said, with foreigners buying 5 to 15 per cent of each project.
- Suburbs with town planning scheme changes — Cottesloe, Canning Bridge, South Perth and Burswood.
- State Government backed developments — South Fremantle power station, Scarborough Beachfront, Water Corporation site in Leederville.
- Private development sites — Television station land in Dianella, Ascot Racecourse, Claremont Showgrounds.
- Apartment projects supporting shopping centre redevelopments.
- Conversion of vacant office buildings in CBD and West Perth to residential use.
Source: Y Research
© The West Australian
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