apartments – Page 4 – PropertyESP

A new look at the Mandurah Train Line TODs … the apartment living options

Those of you who have been following the PropertyESP blog for a while know that we have an appetite for TODs (transit-oriented developments) because of their economic impact.

So we decided to take a look at two TODs on the Mandurah train line, in Cockburn Central and in Wellard.

Wellard is the site of Perth’s first Mandurah line TOD, but like nearby suburbs it started with a focus on houses.

The Cockburn Central TOD however was established with apartments and home units in mind, and the first home units came onto the market in 2008. Wellard followed suit with its first units sold in 2012.

Home units are the more popular accounting for 72% of the units sold from 2008 onwards. The bulk of the other options were apartment houses.

What’s the difference between the two? Home units are completely self-contained and a better standard than flats (which are rarely built these days).

Apartment houses on the other hand, are considered more luxurious and have more amenities.

Two bedroom apartments and home units dominate the Cockburn Central and Wellard TODs… with 40% of sales since 2008 being of 2 bed-2 bath-1 car park and 25% being 2 bed-1 bath-1 car park. 17% were 1 bed apartments and home units.

The dominance of the single car park is a reflection of the property being close to the train line, with good access to the City, but may not reflect the reality of living 10-14km from the beach. In fact, more than 80% of the properties sold had room for only one car.

But with more train stations coming online, we can expect to see more TODs and more developments that will take full advantage of these transit links.

If you are interested in the full results of the sales analysis for Wellard and Cockburn then feel free to contact Samantha Reece on 0452 067 117.

PropertyESP we make sense of property.

Fremantle continues to perform

Despite the doom and gloom about the Perth property market, PropertyESP keeps finding some good news stories and Fremantle is definitely one of them!

We had a look at apartment sales over the last five years for North Coogee, North Fremantle and South Fremantle.

Firstly sales were consistent for these three suburbs across the past five years with about 80-150 properties changing hands per annum.

Secondly we saw that the one and two bedroom apartments had maintained their value over that time and three bedroom apartments were beginning to show signs of recovery.

So anyone who is waiting for the market to bottom out in Fremantle is going to be waiting for some time!

North Fremantle also outperformed the other two suburbs for property values and this could be related to these properties tending to have ocean or river views and as can be seen from the below graph – ocean/river front is commanding a median price point of approximately $6000/sqm plus.

Rental yields for apartments were also higher than the Perth metro at 4.5%.

While you may be hearing generic news about the Perth property market – there is always value in drilling down – and that is what PropertyESP does best!

PropertyESP will be presenting the findings of the Fremantle sales research at a Mirvac sponsored seminar on Tuesday 9^th August at Bib and Tucker from 5.30pm. If you know someone who is looking to buy an apartment in Fremantle – let them know and they can register at info@propertyesp.com.au

Still a place for premium in Perth

Samantha Reece recently attended the official opening of Aria in Swanbourne.

Developed by Blackburne Group, this project is priced from just $515,000 for one bedroom apartments and reflects a standard that, to date, is unsurpassed.

While some companies include elements such as a private dining room or boardroom in their premium developments, Aria has really taken luxury to the next level.

The entertaining area was stunning with uninterrupted views of Perth City and not only included a lap pool and sun deck, but bar area and private dining and lounge that reflected a multimillion dollar mansion in the Western Suburbs.

Coupled with a yoga room, gym, sauna, steam room and wine cellar, Aria successfully conveys a luxurious resort lifestyle.

In particular, the penthouse apartments were designed to reflect a two storey New York loft apartment and this further added to the cosmopolitan atmosphere.

With much talk about the apartment market being more focused on affordability, it is nice to see that some developers recognise that downsizers in fact are looking to spoil themselves, even though they are forfeiting their four bedroom/2 bathroom home for a much smaller domain.

With 16 sales since the unveiling, the Aria project is also demonstrating that there are affluent buyers in the market, but that they are also discerning.

With the apartment market evolving in Perth, we need to remember that while choice of location is important so is choice of style and price point.

PropertyESP has no financial connection to Blackburne and this review has been written entirely independent of Blackburne and its associates. We just like to share with our readers the evolving trends in the WA property scene!

Is it really infill vs greenfields?

Samantha Reece recently MC’d the Future Directions event for the Property Council on the infill vs greenfields debate.

The event came hot on the heels of the Property Council’s Perth Design report which stated that infill only cost the State Government $50,000 while greenfields costs were closer to $150,000.

On the panel were a mix of greenfields and apartment developers as well as LGA representatives and as such the discussion became quite lively.

Certainly the greenfields developers rebuked Property Council’s statements re the cost of outer ring development and reinforced that often they are the ones that in fact incur the costs of infrastructure. They also felt that WA led the rest of the nation in terms of the calibre of communities and liveability.

On the other side of the fence, Mayor Brad Pettitt of Fremantle Council spoke of the need to accelerate infill in their CBD in order to sustain the businesses and restaurants, which suffered outside of the non-peak weekend periods.

Certainly Fremantle Council appears to have fully embraced infill (unlike other LGA’s) and their focus on delivering excellence rather than ordinary should be truly encouraged!

But Brad also acknowledged that homes in greenfields could also reflect sustainability principles and Josh Byrne’s home, which is 10 star rated and built for the same cost as an average home, is living proof of this principal.

Interestingly Brad raised the point that maybe we should rate homes with the same star rating as dish washers and fridges, and that this may be the starting point for raising awareness of the true costs of operating an unsustainable home.

However what became quite clear from the panel, was that choice was important.

While Psaros have made it their trademark to focus on sustainable apartments, the likes of Stockland and Cedar Woods are dealing with a variety of buyers and budget certainly is an influencing factor.

Hence both companies seek to have a variety of builders for their projects and while some residents may rate sustainability highly – others may not – and that is their prerogative.

There certainly was a feeling that State Government needs to play a stronger leadership role in championing infill and sustainability and once again Brad felt that if some Councils continued to advocate “the no change” status, that in fact they should be penalised by reduced allocation of State and Federal funding.

Overall there is a growing consciousness of the need to demonstrate best practice and while WA may be still behind the eight ball, times are a changing. Watch this space!

Many thanks to the panel Dr Brad Pettitt (Mayor Fremantle Council), Col Dutton (Stockland), Chiara Pacifici (Psaros) and John Silla (Cedar Woods).

Micro is the new black

At a recent conference, PropertyESP heard from a young graduate who pleaded the need for diversity in housing within WA.

He spoke about starting out on a graduate salary, wanting to leave home but not wanting to pay $300 rent per week (because he was very rarely at home!) nor wanting to share a group home.

He introduced the concept of micro apartments, which start from just 30sqm and which are a part of most cities’ landscapes – except Perth.

For so long, councils have been opposed to smaller apartments as they are viewed as encouraging low socio economic groups into the community – but the reality is – these are also some of the most innovative housing concepts on a world-wide scale.

The idea behind micro-apartments is that they accommodate all the facilities of a normal apartment, such as shower, living room and bedroom, but their versatility and flexibility is where you really maximise space.

Demand in the Unites States is so great that developers can’t build these micro apartments quickly enough and has led to the Mayor of New York, Michael Bloomberg, seeking proposals from developers to construct micro apartments on city owned land that contain at least 75% of apartments ranging in size between 25 – 28 square metres.

And of course that makes them a highly affordable option, something that Perth is also lacking at present.

The added beauty of these kinds of apartments is that it caters to the sole occupant, which can then free up the 3-4 bedroom apartments and homes, close to the CBD for couples and families.

We can no longer make one style of product and hope it meets the needs of all Perth’s buyers. Choice is vital and micro apartments are one of the solutions which we would like to see heralded to WA.

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PropertyESP undertakes long term sales analysis to tell our clients about various property cycles. We are different from other companies. We like to get into the nitty gritty which then guides development decisions. Basically we make sense of property.

Perth apartment market looks positive in medium term

Samantha Reece attended the Property Council’s multi-unit development conference yesterday and came away with some great learnings that we will blog about over the forthcoming weeks.

But of the highest level of interest was the presentation from David Cresp of Urbis who spoke about Perth’s apartment market.

We are certainly hearing from clients that they are having to work harder to secure sales and the data outlined in the presentation indicated factors that were contributing to this current state.

Firstly David outlined the fact that Perth has the lowest proportion of apartments nationally at 9% of the housing stock, whereas Melbourne has 15% and Sydney 26%. While this is a trend that will alter over time, Perth is certainly behind the other national cities when considering density.

And this is even more evident, with Perth’s apartment approvals in 2015 at the same level as it was back in 2008. And while there are 44,000 apartments in total in Perth, 25,000 of these were constructed before 2000 and hence represent older stock.

There is no denying that WA needs 50,000 more dwellings to match underlying demand and this indicates that there is no oversupply of housing stock, especially as there were only 23,000 dwellings undergoing construction in 2015/16.

And while there is an expected delivery of 4000 apartments in Perth in 2017, if demand increases from the current 20% to 30% then there will be a need for 5500 apartments. Once again this is an indication that there is not an oversupply in this specific market either.

The presentation also outlined that in 2012/13 Perth experienced an undersupply in apartments and that is why the market appeared to be moving faster, than current times.

And while there were 13 projects and 1300 apartments launched in the last quarter, not all will proceed.

As was stated, demand is continuing but Perth is now witnessing a condition where supply is currently exceeding demand – but this is just a short term situation considering the ongoing demand for housing stock.

The data also demonstrated that in 2015 there was $1.5 billion in apartment sales. Of this 86% of the completed projects are sold, 65% under construction are sold and 31% in presales are sold.

In addition 50% of buyers are owner occupiers, 20% investors and 23% FIRB.

As such the current situation, where supply does exceed demand, is just temporary and there is no denying that CBD located properties are achieving better sales than outer suburbs. On that basis it is more important than ever that your sales team are clear about your project’s unique selling proposition and ultimately are proactive in closing the sale!

If you would like to brush up on your sales team’s selling skills then contact Samantha Reece on 0452 067 117 – we can guarantee to give your project that elusive competitive edge.