Posted on Friday, August 3rd, 2018 in by Matt Garmony
The Perth residential apartment market is set for an extended trough in the property market cycle. A report by WA Business News (WABN) in June 2018 indicated 26 major apartment projects, with greater than 50 apartments per complex. These projects, situated in the Perth CBD and inner suburban localities, are either proposed or under construction, and will produce approximately 4,060 dwellings.
WABN stated a further 4 major projects are at planning or approval phase, including 4,500 residential apartments proposed at the Belmont Park precinct, 324 apartments at Iconic Scarborough, 300 residential apartments at EQ West (Elizabeth Quay) and 220 apartments at Brookfield Twin Tower Elizabeth Quay.
WABN detailed in a 9 page apartment feature article on 18 June 2018 that “Perth recorded 410 apartment sales for the first quarter of 2018”. Based on the 4,060 dwellings from the 26 major apartment projects, Perth has approximately 2½ years supply of apartments already underway or proposed. Our enquiries to real estate agents selling apartments in large complexes in Perth indicate enquiries and sales are slow and prices are very competitive.
Future redevelopment areas include Subiaco Oval, Princess Margaret Hospital Site, East Perth Power Station, Belmont Park and the WACA ground. Given this, there is an adequate supply of additional apartment development sites over and above the traditional locations of Burswood, South Perth, Applecross/Mt Pleasant, Perth CBD, East Perth, West Perth, Northbridge and the western suburbs. Major shopping centres such as Garden City, Karrinyup, Morley Galleria and Westfield Carousel have all earmarked redevelopments to include residential apartments, further adding to the supply.
With the current slow growth in the WA economy, a continuing high (yet improving) residential rental vacancy rate of 5.1%, and a low median rental rate of $350 per week (REIWA Statistics April 2018), we are of the opinion apartment prices will remain stagnant for some time.
If you have any queries in relation to pre-purchase valuations for residential apartments in Perth, please contact our licensed valuers for independent property advice using the “contact us” page on our website, or phone us on 9474 2220.