How a few streets can make a big difference to property values

As always, keen to see what is happening in the Perth apartment market, PropertyESP recently took a look at settled sales for the East Perth area from 2015-2018.

Looking just at apartment houses, apartment units and penthouses we found that the East Perth market was showing signs of price recovery across the board.

east perth graph 1 2018

But when we broke East Perth into precincts we found that Wellington Square compared to Claisebrook and the remainder of East Perth, definitely demonstrated a price difference.

east perth graph 2 2018

And this was evident whether talking about apartment houses, units or penthouses or even 1, 2 or 3 bedrooms.

east perth graph 3 2018

east perth graph 4 2018

Who would have known?

It is quite evident that while sales vary across suburbs they can also do so within suburbs and hence before you purchase land for development it really is best to check your facts.  At the end of the day it can play a major factor in your pricing and profit and hence it is essential to know how the sums add up!

If you are seeking that level of detail then contact Sam at PropertyESP because we are all about drilling down into the nitty gritty! And we are the only company in Australia that provides this kind of insight!

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Women are taking over the world (did you get the memo?)

After a number of recent events including International Womens’ Day, PropertyESP Director Samantha Reece thought she would share some insights into how women are forging ahead with property ownership.

“Westpac’s annual Home Ownership Report recently revealed that women are overtaking men when it comes to home ownership.

A survey of more than 1,000 Australian home owners and first-home buyers found that women are ahead of men in most categories:

  • more women have bought a home to live in (women 28 per cent of survey respondents compared with men 20 per cent)
  • more women have bought an investment property (16 per cent compared with men 13 per cent)
  • more women are renovating (29 per cent compared with men 27 per cent)
  • and more women are selling a property (17 per cent compared with men 14 per cent).

The report also found that more women than men ‘strongly believe’ that ‘owning your own home is a reflection of your success in life’ (up 26 per cent on last year) and that ‘property is a pathway to wealth’ (up 10 per cent on last year).

Female first-home buyers were twice as likely as men to consider good investment potential in a home as essential (35 per cent vs men 18 per cent), and were also twice as likely to consider buying an investment property in the next five years (22 per cent vs men 11 per cent).

Overall, 71 per cent of women are ‘considering housing actions in the next five years’, as opposed to 61 per cent of men.

And data from the ATO shows the number of female taxpayers receiving rent has risen from just under 14 per cent in 2010-11 to 15.4 per cent in 2014-15. By comparison, over that period men only saw an increase from 14.7 per cent to 15.9 per cent. The ATO data also indicates that approximately 47 per cent of all investment properties are owned by women.

With an increase of 3000 females in the workforce in WA over the last quarter, it is evident that women are securing greater financial independence and hence making their own business decisions when it comes to property.  This is also affected by the fact that the average age of a woman who marries in WA is now 29 and the State recorded the highest proportion of divorces nationally at 48.3% in the 2016 census.

But more close to home, PropertyESP recently conducted research with buyers of the Stockland Completed Homes and found that women had a huge influence over the final purchase.  While the husbands took their wives to other houses that were cheaper and bigger – it was futile – because when these women inspected the Completed Homes, it was literally love at first sight!  There were also cases where the women sourced additional income from lenders and family in order to stretch their budgets and buy what they wanted!

These trends will ultimately have an influence over how a company markets and sells their properties – especially on a face to face level in the sales office.

The question is – are you ready for this new wave?”

Perth does offer apartment choice

PropertyESP just completed some research on behalf of the Property Council examining the number of 3+ bedroom apartments located in the Perth LGA.

Contrary to popular belief, PropertyESP actually identified 1135 sales of 3+ bedroom apartments from 2012-2017, with the bulk of these in East Perth (697).

But other locations including Crawley (134), Perth CBD (127) and West Perth (134) also reflected these larger apartments.

But what we also witnessed was the decline in sales for these larger apartments with 279 sales recorded in 2012 and just 95 in 2017.

It makes us wonder if this decline is due to these apartments being tightly held onto or alternatively a lack of supply?

Over 900 of these sales were also apartment houses in contrast to penthouses or home units and interestingly it was these apartments that reflected an increase in median price from $690,000 in 2012 to $860,000 in 2017.

On the other hand penthouses which were selling at a median price point of $1.7 million in 2012 are now selling at $1.5 million and home units (smaller complexes without lifts) which had started at a median price point of $534,000 in 2012 were priced at just $477,500 in 2017.

12 Jan blog

However, considering trends with baby boomers and the family sector, apartment developers will have to consider increasing the ratio of three bedrooms within the City, beyond a token gesture.

Data has shown that Perth is second to Sydney across the nation for the number of families residing in apartments.

Plus nationally only 5% of our seniors in fact choose a retirement village when looking to relocate out of their traditional family home.

Perth is evolving and people are choosing to reside in the City because of its strong employment base and vitality (as a result of improved infrastructure) and on that basis we need to reflect this in our ongoing housing options.

If you are seeking this kind of intelligence (and who wouldn’t?) then contact the team at PropertyESP.  We make sense of property.

Apartments transform suburbs – and for the better!

Curious to see what has happened with the recent 2016 census, PropertyESP took a look at 3 suburbs that have been transformed by apartment developments to see what other changes to the suburb this had brought.

East Perth – originally an industrial suburb, EPRA (now MRA) was established in 1991 to redevelop and urbanise the suburb.   It did so with the development of Claisebrook Village, with introduced 1450 new dwellings as well as retail and commercial properties on the site of the former East Perth Gasworks, scrap yards, contaminated industrial sites, empty warehouses and railway yards (Source: MRA Claisebrook Village Fact Sheet).

In the 2001 Census of Population and Housing, East Perth (which is broader than just Claisebrook Village) had 1631 occupied private dwellings that were apartments and flats (making 81.2% of all occupied private dwellings in the suburb).  By 2016, this had risen to 4018 apartments and flats (88.8% of occupied private dwellings).  The big transformation of East Perth occurred between 2006 & 2011, with the addition of 1160 occupied private dwellings that were apartments and flats (a 67% increase), and between 2011 & 2016, with the addition of 1125 occupied private dwellings that were apartments of flats (a 39% increase).

What else changed in East Perth over this time?

  • There was a change from these apartments and flats being predominantly rentals to owner occupied.   In 2006 and 2011, the level of owner occupancy was hovered around 34%.  By 2016, 64% of occupied private dwellings that were apartments or flats were owner occupied.  Over the same period, the level of owner occupancy for apartments and flats in Greater Perth was unchanged (around 32%).  With the redevelopment, people are choosing to own and live in apartments and flats in East Perth.
  • Median household incomes for the suburb have surged ahead of Greater Perth.  In 2006, the median household income for East Perth was $1106 per week … on par with the $1086 for Greater Perth.  By 2016, median household income for East Perth had risen to $2301, well ahead of the $1643 for Greater Perth.
  • The types of households attracted to the suburb has changed.  In 2001, 46% of East Perth households were lone person households and 29% were couple households.  By 2016, the two were on par – 37% lone person households and 36% couple households.  Both groups have remained relatively stable across Greater Perth over the same period.  Whilst families have not been attracted to East Perth in droves – they currently make up 16% of households – they have risen in number, up 251% from 210 households in 2001 to 737 households in 2016.

Burswood – another older suburb that gained new life and widespread awareness with the building of the (then) Burswood Casino in the 1980s.  The suburb was officially gazetted in 1993.  Subsequent apartment developments in a similar vein to East Perth have continued to change the suburb but it’s location on the eastern bank of the Swan River provides for a different lifestyle experience to East Perth.

The 2001 Census of Population and Housing counted 187 occupied private dwellings that were apartments and flats (making 37.4% of all occupied private dwellings in the suburb).  By 2016 this had risen 183% to 530 occupied private dwellings that were apartments or flats.  More importantly, this changed the housing profile of the suburb, with 57.2% of occupied private dwellings being apartments or flats.  The really big transformation in Burswood occurred between 2006 & 2011.

What else changed in Burswood over this time?

  • As was observed in East Perth, there was an increase in owner occupancy of apartments and flats in the suburb.   In 2001 and 2006, the level of owner occupancy was hovered around 21%.  This rose to 36% in 2011 and 41% in 2016.  Apartments and flats in Burswood are still the domain of renters, but it has seen a doubling of owner occupancy levels over 15 years.
  • Median household incomes for the suburb have surged ahead of Greater Perth.  In 2006, the median household income for Burswood was $1091 per week … on par with the $1086 for Greater Perth.  By 2016, median household income for Burswood had risen to $2273, well ahead of the $1643 for Greater Perth.
  • The types of households attracted to the suburb has changed as well.  In 2001, 38% of Burswood households were lone person households and 31% were couple households.  By 2016, the situation has reversed – 30% lone person households and 38% couple households.  The proportion of family households has also increased, up from 18% in 2001 to 23% in 2016.  In numbers, they have risen 14% from 87 households in 2001 to 213 households in 2016.

Cockburn Central – the first purpose built TOD in the Perth metro area.  It was named in 2007 and was counted as a separate suburb for the first time in the 2011 Census.  The 2016 counted 403 apartments or flats as occupied private dwellings, making up 70.8% of the 569 occupied private dwellings in the suburb.  At 10 years of age, there’s not much  history or transformation to explore.  But as a purpose built regional centre for the surrounding area and designed with density and connectivity in mind, it serves as an interesting comparison to the other suburbs.

Firstly geography, Cockburn Central is 24km from the Perth CBD, connected by the Kwinana Freeway and Transperth rail.  That makes it further from Perth than East Perth and Burswood.  It has a number of employment opportunities close by, and is also well placed to connect to employment opportunities in the Perth CBD and the SW metropolitan industrial areas.

Who is living in Cockburn Central?

  • Cockburn Central is very much a renters suburb.  At the 2016 Census of Population and Housing, 71% of occupied private dwellings that are apartments or flats are rented, higher than for Cockburn Central properties in general (58%).   The level of renting is higher than for Greater Perth.
  • Median household income for the suburb is similar to Greater Perth – $1625 per week.
  • 37% of households are lone person households (similar to East Perth), 34% are couple households (lower than East Perth but, like East Perth, the proportion of couple households is growing).

With the newness of this suburb, it does tend to however indicate that it may follow the same pattern as Burswood and East Perth in time.

As PropertyESP has always attested – apartments in the housing mix does tend to attract a more professional resident with higher disposable incomes and that is good for the LGA overall.  If you would like to know what is happening in your suburb of development contact Sam Reece at info@propertyesp.com.au.  We love to get into the nitty gritty!

Burswood premium continues

PropertyESP will be releasing a media statement this week after examining the Burswood apartment market from 2013-2017.

While overall the median price for apartments in this locale has grown by 11% from $700,000 to $780,000, it is the fact that this growth has occurred across all bedroom configurations that makes it even more interesting.

One bedroom increased its median price point by 6% in these four years, two bedroom 17%, three bedroom 14.5% and four bedroom 8%.  This contrasts to other apartment nodes nearby.

Plus in this time frame only 16 properties resold and when you see property being held onto this tightly then there tends to be an indication of high satisfaction and a sense that more growth is anticipated.

The sales data also demonstrated Burswoods’ preference for larger apartments with 21% three bedroom apartments sold in the four years, in comparison to its counterpart in Rivervale which sold just 13%.

There are calls from some Councils that apartments in fact can dilute the premium brand of a suburb – but in this case it is quite clear that Burswood not only has established this solid reputation but also maintained it.

Plus with the Stadium finishing and the Burswood Peninsula Precinct Plan on the horizon, this suburb will only continue to grow in value.

If you like the way we look at data – then let us have a look at your suburb.  Unlike Eastern States companies, PropertyESP gets into the nitty gritty and we look at the long term – not just the last quarter.  Because the devil is in the detail!

 

Freedom Fit is the new Downsizer

You may have seen PropertyESP’s Director Samantha Reece on Channel 7 News Wednesday evening talking about the concept that she has hatched – known as Freedom Fit – under the WA Apartment Advocacy banner.

After conducting recent focus groups with seniors, Samantha found that when baby boomers moved to an apartment – while they were downsizing the living space they used – they were not downsizing on their mortgage or their lifestyle.  Hence the common term downsizer was now somewhat passe.

In fact these baby boomers knew that they would have an abundance of free time once they moved into an apartment and and hence sought locations that offered the corresponding lifestyle that would fill this time.

On that basis they sought locations that offered coffee strips, with natural elements such as the beach or river and also proximity to major hubs such as Perth or Fremantle.

In particular the apartment lifetyle also tended to be a motivating factor to encourage the residents to get out and try new activities and hence provided a new lease on life.

As a result of these findings, Samantha coined a new term – Freedom Fit – to better describe the motivation driving this older demographic.

These retirees were also keen on knowing their neighbours and recommended joint services within districts, such as a concierge service.

It was also evident that the senors in these groups were delighted with the apartment lifestyle and it is these added benefits that apartments offer over traditional retirement villages, which will now be a defining element of Perth’s evolving senior’s housing.

And what is clearly evident though is that  this age group will dominate the market for a while yet – and as such we need to be conscious of what they are looking for including more living space, extra bedrooms and storage.

As the market begins to become more sophisticated with its appetite for apartments – so must our choice of designs.

Interesting times ahead!

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:

  1.  East Perth
  2. Perth
  3. Rivervale (The Springs)
  4. South Perth
  5. Scarborough
  6. Fremantle
  7. North Perth
  8. Burswood

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.