The Perth new apartment market has bounced back, recording the strongest quarter of activity in five years as owner-occupiers - including downsizers - seek to snap up luxury off-the-plan apartments, new research has found.
According to new research by property consultant Urbis, there were 475 Perth new apartment sales with a collective value of $430 million in the second quarter of 2021, which represents the strongest quarter of activity since 2016.
Urbis says the market continues to be driven by owner occupiers who in the second quarter of 2021 had the highest share of market activity, at 76 per cent of sales.
In addition, in a reversal of trends seen over the last few years, more apartments were sold off-the-plan or in buildings under construction (52 per cent of sales) in the quarter, than in completed apartments.
“The demand for apartments continues to be strong and this is reflecting the growing confidence in the Perth property market,” said Urbis Director David Cresp.
Owner occupiers are now confident in being able to release equity when they sell their house and making a choice to right size either now or at some stage in the future when buying off the plan.”
Mr Cresp said the strong sales appeared to be a vote of confidence in the ability of Perth developers to deliver a quality product.
He said many of the owner occupiers were looking for more upmarket apartments with 53 per cent of the sales being in projects that Urbis classified as high end or luxury/premium developments.
These types of apartments generally only account for less than 40 per cent of sales.
This led to an average new apartment sale price in the quarter of $900,214, which was the highest recorded by Urbis and a big jump from the average price of $633,206 in the last quarter of 2020.
“The fact that almost $430 million worth of apartments were sold in the quarter really highlights that the Perth apartment market is maturing and that there is significant levels of demand for well located, well designed and high quality apartments in Perth,” Mr Cresp said.
Perth’s Fringe-South precinct recorded the highest number of sales, with 179 apartments sold across 27 projects in South Perth, Applecross, Mount Pleasant and Como with a weighted average sale price of $1.3 million.
The other area which saw strong sales was the city’s Western Suburbs (76 sales across 26 projects in North Fremantle, Claremont, Nedlands, Mosman Park and Floreat with an average sale price of $913,000).
The Western Australia Government is offering a stamp duty rebate of up to $50,000 for off-the-plan apartment purchases, where construction on the apartment project has not commenced. The potential $50,000 rebate remains in place until at least October 2021.
Comment from our CEO
Downsizing.com.au CEO Amanda Graham said the Urbis research confirmed the dominant role that downsizers were playing in the current housing market.
“Downsizers are taking advantage of the current boom market for houses to sell up, release equity and move into a home and area which is far better suited to their stage of life,” Ms Graham said.
“What’s more, by buying off-the-plan downsizers are in a stronger position to make a range of modifications to the apartment’s final design to suit their tastes.
“Given the level of economic activity being generated by these apartment sales, and the benefits to society and people from downsizing, it would be welcome if the WA Government extended its current off-the-plan stamp duty rebate past October.”
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