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Wealthy downsizers seeking luxury apartments in Perth’s inner suburbs have boosted new sales to their highest level in five years.
Property developer Paul Blackburne secured the city’s most expensive penthouse sale at $19.3m earlier this year at his One Subiaco project. Construction of One Subiaco, Subiaco’s first highrise luxury apartment building, began last year on the former Pavilion Markets site.
Blackburne has even grander hopes for the penthouse in his $350m Claremont development, The Grove, with more than 80 per cent of the project having quickly sold off the plan. Its $22.7m penthouse will include 1900sq m of living space across two levels. The Grove ranks as one of Perth’s largest and fastest-selling residential projects long ahead of its spring 2023 scheduled completion.
The latest data from consultancy Urbis found that between March and June 475 off the-plan sales worth a combined $430m were sold across Perth. It was the highest off-the plan sales volume since early 2016, following two strong prior quarters that yielded 871 sales over the six months to March.
Off-the-plan sales over the June quarter were higher than resales of existing apartments, according to Urbis director David Cresp.
Established offerings now listed are headlined by the lavish Mardalup riverfront penthouse with a $20m price tag. The two-floor, East Perth apartment at 5/11 Brown St has a spacious 1897sq m floorplan, 898sq m of internal living, 774sq m of balconies, and an eight-car garage. It is listed through Peter Robertson of William Porteous Properties International.
“This is without question one of Australia’s finest luxury penthouses,” Robertson says.
Urbis expects 19 projects and 1486 apartments to be launched over the next 12 months.
The fresh off-the-plan offerings accompany a sharp drop in the number of unsold completed apartments – down to 1210 from 1838 at the start of the year, Urbis advises. This year will see some 1160 completions, well below the 2017 peak completion rate of 2880.
Buyers of all new apartments in the West – owner occupiers and investors alike – qualify for state government stamp duty rebates. The recent state budget proposed a 50 per cent rebate up to 50,000 with no cap on the purchase price.
Cresp says the market has been maturing, driven by owner-occupiers seeking larger apartments. More than three-quarters of Perth’s new apartment buyers were owner-occupiers, he notes.
The Perth apartment market has had the lowest proportion of property investors of all capital cities, with Urbis data showing Perth has gone from 48 per cent of apartments being purchased by investors in 2016 to around 28 per cent in 2020. And more than half of the recent sales were in developments classified as “luxury” or “premium” with the average sale price at just over $900,000.
Edge Visionary Living led by Gavin Hawkins had two of the top three fastest selling projects. Edge’s Riviere project on the riverfront in Applecross had 33 sales after its June launch with an average price of almost $2m. On its envisaged late 2023 completion residents will share dining and lounge areas, a wine tasting room, and whiskey den plus wellness amenities including a sauna and steam room. The Riviere will boast a gold class-style cinema, and fivestar games room, while street-level amenities include public restaurants and wine bars.
Edge’s Lumiere South Perth project has 100 apartments with half sold prior to its July launch. There will be an infinity pool on the development’s 18th floor with a lounge and dining area, while a wine cellar, games room, spa, sauna, gym, yoga studio, and golf simulator add extra layers of opulence and entertainment.
Both Edge projects have been designed by Hillam Architects with Hawkins saying the buyers, retirees, empty nesters, and mature-aged singles in the city’s premium suburbs, wanted the experience of a traditional home.
South Perth’s 37-level Civic Triangle project, marketed by Dempsey Real Estate, includes a resident-only sky lounge. Its top four levels are expansive sky homes including two luxury penthouses with over 300sq m of internal living with customisation options. The sky homes and penthouses range from $2m-$9.5m.
“The sky homes have been met with good demand from buyers both local and interstate,” agent Mal Dempsey says. They have views over the Perth skyline, the river, ocean, escarpment, and even Perth Zoo. Amenities include a pool, children’s playground, and dog exercise area. Completion is expected by the middle of 2023.
Vivien Yap from Ray White Dalkeith Claremont and Ray White Vivien Yap Exclusive Projects says downsizers have been looking to take advantage of the higher values now achievable on their residential homes.
“The property market is booming in Perth so all apartment types are selling at the moment,” Yap says. She sees the highest demand for larger apartments in smaller, boutique, mid-rise projects that have luxurious finishes.
“Many buyers want the ability to modify and to some extent customise floor plans and finishes to meet their own needs and taste,” she says. “Since Covid, people have realised they are spending more time at home and are spending more time and money to ensure their home suits their needs. There’s increased interest to understand how flexible working spaces mainly used as home offices are part of the home, especially brand new, off-the-plan apartments.”
Price per sqm varies depending on location and specifications, advises Amaro Velho, general manager at Ray White Vivien Yap Exclusive Projects. “Prices can vary from $8500/sq m in Nedlands to over $25,000/sq m in coastal-front projects like Cottesloe,” he says.
“The pandemic has affected the apartment market positively as government incentives and stimulus packages have spurred the market to act more decisively. Forward offerings are still some time away for completion so current availability of good stock is limited.”
Velho acknowledges that construction costs are rising given shortages in skilled workers, increased prices of resources and labour, and delays and steep rises in shipments from overseas.
“This will have a bearing particularly in terms of supply as completion times of new projects is likely to drag out putting pressure on the increased demand that we are currently seeing,” he says.
Another issue agents acknowledge as one of the barriers to investment is the WA state government foreign buyers surcharge. Before the January 2019 surcharge was introduced, foreign buyers accounted for around 20 per cent of apartment sales for new apartments, whereas in 2020 this fell to only 6 per cent of purchasers, according to the Property Investment Professionals of Australia.
Jonathan Chancellor, Weekend Australian, Page 36, 9 October 2021