Apartment supply update
Samantha Reece of PropertyESP recently attended and participated in the Property Council Apartment conference where Urbis revealed their First Quarter 2017 results.
At present 20% of Perth's building approvals are for apartments compared to 60% in Sydney and 46% in Melbourne.
This equates to 3797 apartments currently under construction.
There are at present 134 active apartment developments in WA and 11,194 apartments, which only represents about 10% of the apartments nationally, which tends to put WA's supply somewhat into perspective.
There were 258 sales in the first Quarter 2017 with an average price of $650,000. These sales were primarily in the CBD and Western Suburbs. 25 of these sales were attributed to Essence apartments alone, located in Claremont.
58% of the buyers were owner occupiers while 25% were identified as investors.
2017 will be a peak year of construction with an anticipated 3200 apartments delivered. While the number of sales matched the apartments launched in Q1 2017, there will be another 800 apartments delivered in Q2 and 1200 in Q4.
Certainly the data still upheld Urbis' prediction that there will be a shortfall of apartments by 2020. This is primarily because not all projects will proceed to construction phase.
This data also aligned with REA's research which showed that the top suburbs searched for apartments were as follows:
Rivervale (The Springs)
There is no doubt that Perth is still far behind the other states in terms of apartment supply - but it also shows that demand is relatively strong and more so now from the owner/occupier market than ever before.
Certainly the next 12 months and commencement (or non) of a number of projects will impact on these forecasts and hence it will be an interesting market to observe.