Appetite for change is on the horizon

PropertyESP recently attended the Perth Cities Summit co-ordinated by John Carey Member for Perth.  With over 350 people in attendance, everyone was seated randomly and provided with 35 ideas that had been derived from the previous workshops hosted in Northbridge, East Perth and West Perth.

These ideas included a variety of themes which aligned with PropertyESP’s agenda including:

  • Revitalise Heirisson Island as an indigenous cultural hub
  • Create Renew Perth to activate vacant properties
  • Ensure a full year long events and activation plan for the City
  • Establish the role of Night Czar or Mayor to drive night time economy
  • Facilitate the construction of a cable car from Elizabeth Quay to Kings Park
  • Cut red tape around use of the Swan River to create more life and vibrancy
  • Establish Perth as a canopy city
  • Abolish al fresco and street activation fees for small business

However at the end of the session the top five areas which the attendees chose included:

  • Partner with Noongar people to recognise indigenous culture and history in the City (33%)
  • Establish Perth as a canopy city (21%)
  • Create Renew Perth to activate vacant properties (19%)
  • Set an ambitious population target backed by innovative planning (17.8%)
  • Establish Perth with clear community precincts backed with precinct planning (9.2%)

While the final results have not been released – it was clear from a number of people on our table, and the panel, that there was a need for action rather than ongoing planning which only ultimately creates inaction.

And as Marion Faulkner from Committee of Perth stated, we as a city need to embrace a state of mind that is can-do.

The fact is, 350 people attended a session on a Saturday morning because we are passionate about change – and change for the better.  But in fact all of us need to now invest in our City – if not with financial contributions then at least our energy.

And now is the premium time with the suite of infrastructure projects that will be delivered in 2018.

PropertyESP urges the people of Perth to no longer be passive – but rather passionate about how Perth can grow – and how we can catalyst change.  The question is – are you up for the challenge?

 

 

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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!

 

Night time economy part of WA’s future

With all the inner city development occurring, a colleague of PropertyESP recently attended the Australian Night Time Economy (NTE) conference in Melbourne.

This conference dealt with the fact that the night time economy, which for so long has been associated with bars, restaurants and adult entertainment in fact was evolving and in the UK this economy represented $66 billion in trade alone (or 6% of GDP).

Closer to home, Brisbane’s NTE grew by 25.2% from 2009-2014 from $4.97 billion to $6.231 billion.

With changing work habits, multicultural diversity and in fact a 24 hour global clock, we are less and less inclined to think that night time is just for hedonistic activities.

But this means that if we want to transform some of our City into true night time economies we need to think across planning, place making and regulation.

This means that we need to consider pop up markets in car parks.  And temporary installations. And be more liberal with parklets.

This also means that we need to entwine our fashion, food and entertainment outlets and more so be open for custom.

That means that sometimes we have to take a risk and in fact subsidise these concepts to allow for creativity and sense of destination.

With so many areas undergoing rejuvenation in Perth at present – this is the perfect breeding ground for innovative night time solutions.

The question is – are we going to seize this opportunity?

The team at PropertyESP dare you too!  The time is certainly ripe for disruption!

Desire for East Perth to gain 24/7 heartbeat

Samantha Reece recently attended the East Perth session of the Cities Summit that has been co-ordinated by Member for Perth John Carey.

Over 60 people attended this session which comprised of businesses, developers, residents and interested parties.

Quite predictably the session dealt with the areas strengths, its problems and what the community would like to see occur.

East Perth was liked because of its walkability, the gardens and open spaces, Claisebrook Cove and the fact that the area felt calm and relaxed.  In particular the residents enjoyed the fact that while they were living in the City it felt like they were in fact residing in a suburb.

However, there were certainly rumblings about the impact of foot traffic once the Stadium was completed and inexplicably this turned into concerns about safety.

But what was very clear was that East Perth has a Monday-Friday, 9.00am-5.00pm heartbeat and hence outside these times East Perth appears somewhat of a ghost town.

Some of the residents however enjoyed this low profile stating that they could travel to Northbridge and Perth for their entertainment.  But this tends to fly in the face of what a TOD (and that is the basis for East Perth) is all about.

There was a sense that East Perth was missing small bars and night activation and that the vacant business premises detracted from the overall vitality.

The community certainly wanted to activate the area around Perth Mint and also turn Wellington Square into a pleasant space to recreate in – rather than avoiding it all costs.

The audience talked about movies in the park, markets at the WACCA car park, setting up pop up shops in the vacant premises and overall a more cultural atmosphere.

This obviously has a cost factor associated with these activation strategies and while John Carey may be seeking the City to hire a place maker for East Perth – it also needs people.  There is no doubt that East Perth has been undercooked for density – like Subiaco – but this is an aspect that can be rectified as we move forward.

With the Stadium due for completion in 2018 this will certainly increase flow through traffic – but will they in fact stay and recreate in East Perth?  And this is very much the issue of the chicken and egg scenario.  Do you create the amenity so that people stay – or do you wait for the crowd and then create the activation?

Either way – there are some real opportunities for East Perth on its horizon and this community can either embrace it – or turn their back on it.  But from the conversation we observed, there is a real desire to turn East Perth into a 24/7 destination and that will take input from all parties and not just a place maker hired by the City of Perth!

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.

 

 

Perth land prices most affordable nationwide – but lack of variety is our downfall

Samantha Reece, Director of PropertyESP recently attended the UDIA lunch with Colin Keane of Research 4 and then participated with the panel discussion alongside David Cresp (Urbis) and Gavin Hegney.

Certainly Colin’s presentation was somewhat telling of Perth’s current status for land sales.

While Perth peaked in 2013 with 1078 lot sales per calendar month.  In 2016 our underlying demand for land is now 637 lots per calendar month and actual sales are 478.

However there are a number of reasons why we are having this reduced success rate – and it is primarily to do with population.

First of all, Perth’s demand for land is driven predominantly by employment.  For every 100 people employed there is the direct correlation of 38 lot sales.  This ratio in Sydney is 17 lots to every 100 people and in Melbourne 26 lots.

To broaden our market we therefore need to consider a number of options – including net migration with emphasis on education, temporary work visas and holiday visas.

Nationally 56% of land sales are non-local demand.  In Perth it is 16%.  This means that 84% of our land purchasers are based locally.

Perth therefore needs to emphasise our market and attractive lifestyle in order to trigger interstate and foreign investors and certainly consideration needs to be given to delaying the State Government’s foreign buyer’s tax, as this could further reduce demand.

Tourism is also a key player with our land sales growth.

Nationally 50% of short term visas are for holidays – in WA our rate is 11%.  As Colin stated we need to grow our portfolio of tourism experiences and hence concepts such as gondolas connecting Elizabeth Quay and Kings Park no longer seem so farfetched.

Perth has well recognised tourism sites such as Rottnest Island, Kings Park, Elizabeth Quay and Swan Valley.  But now what we need to do is make these experiences deeper and more impressive so as to drive tourism spend to our state in preference to others.

Immigration also catalysts further population growth and so attracting students to WA for education purposes will undoubtedly attract their families.  The same can be said for immigration as a whole.

But there were two final gems of knowledge.

Firstly that WA has the cheapest land in the nation at an average price of $225,000 compared to Melbourne $272,000 and Sydney $423,000.

But while this is positive news, it is our stagnation in the small block sizes ie 450sqm that is killing the market and hence we also need variety of lot sizes to cater to all demographics.

And secondly, WA needs variety across a number of realms – our economic basis, our population and our supply of housing options.

Undoubtedly WA needs to grow its global handshake.

While Government has reduced the FHOG and other such stimulants, what its core focus should now be, is to attract and then retain people.

As such, while the Government may be initially focused on servicing WA in regards to Metronet etc, its top priority should be to work with private enterprise, on ways to boost WA and its profile.

Major events, stimulating tourism sites and golden education opportunities are the ingredients that will return WA to a stronger population market – and one that will help the economy overall.

Perth is experiencing a period of disruption – and that is going to definitely also going to affect the land sector.  The question is – are you prepared?