Appetite for additional car bays prevalent

Recent research conducted by WA Apartment Advocacy has shown that while 70% of the 174 respondents were happy with their allocated parking bays in their apartment development, an astonishing 50% would be prepared pay an additional $25,000 for another car space.

Of the 30% who were not happy with the number of allocated parking bays, the majority of these were residents with just one car bay.

We have often heard the mantra from developers that they would be happy to provide additional bays if buyers were prepared to pay for it and this data now suggests that the appetite for extra parking is in fact prevalent.

This largely stems from the fact that 50% of the respondents were still reliant on their vehicles for work, shopping and leisure and while the Metronet will alleviate this situation, it is still somewhat in the distant future.

Interestingly 15% of respondents who did live close to public transport were prepared to forfeit their car bay and save the $25,000 on their apartment price.

The data also showed that 30% of the respondents were unhappy with the allocation of visitor parking in their development, with many citing that residents were using these bays as an overflow measure.

For some time now Local and State Governments have been seeking to lower the ratio of car bays to apartments and yet the research does demonstrate that this planning move is somewhat premature.

The research also begs the question as to why developers are not seeking to sell car bays as an ancillary aspect to the apartment itself.

Further improvements that residents were seeking to their parking woes included electric car charging points, dedicated car washing/cleaning bays, larger parking spots and greater security.

This research – if nothing else – clearly shows that developers need to be researching their buyer’s needs before making any assumptions.  This will undeniably assist with their own design process as well as overcoming imposts by planning regulators.

If you are interested in hearing more about WA Apartment Advocacy and its research results register at www.waaa.net.au.

 

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The Springs shows robust results

It seems that not everyone is as much of a fan of The Springs in Rivervale as PropertyESP is and so we conducted an analysis of settled sales from January 2014 – June 2016 to just work out what was really happening in this location.

Looking at 348 sales in that 2.5 year period there were a number of positive points that we felt should be brought to light.

By far the two bedroom sales have been ahead of one bedroom, with 2 bedroom apartments representing 55% of sales in 2014, then 60% in 2015 and 77% in the first half of 2016.  This compared to one bedroom sales of 45%, 40% and then 23% for the same correlating periods.  This could be heavily influenced though by what is on offer.

Over the two year period, median sales price for the apartments in The Springs has been $501,000 and price per square metre of $4910.

One bedroom sales achieved a median sales price of $420,000 and two bedroom $538,000.  Despite this price variation, when you compare price per sqm it is evident that the two bedroom apartments achieve the price they do, purely based on size.

Between 2014-2015 one bedroom prices only fell by 6% while two bedroom apartments fell by just 2%.  This was also reflected in the price per square metre results.

There was also a small price premium for those properties located opposite green space and the river over those located further away.

However, just like Scarborough, The Springs is completely vanilla in its offering.  The majority of apartments sold were 2 bedroom or 1 bedroom apartments. 97% of the sales were of apartments where the apartment complex had an outdoor entertaining area and 90% a gym and pool.  As such, having the amenities such as gym, pool or entertaining area had no influence over the price per square metre between the projects.

With the area already offering a large number of apartments, any new entrants should be considering alternative amenities as well as various bedroom configurations in order to provide a distinctive point of difference.

While The Springs appears to be weathering the current market with a degree of robustness, it is evident that in order to stand out from the crowd, incoming developers need to be more creative in their offering.

It will certainly be interesting to see how The Springs evolves over the next 12 months with the opening of the 4.5 star Aloft hotel and then the stadium in 2018.

Regardless, this is a location which is sought after due to its proximity to the river, freeway, airport, stadium and casino and on that basis is a precinct to be closely monitored over the next 18 months.

WA Apartment Advocacy provides balance

Long term property commentator Samantha Reece has launched this week the WA Apartment Advocacy (WAAA) to generate open discussion about the role of apartments within the state.

Motivated by the sway of NIMBYism (Not in my back yard) that tended to dominate Council decisions, Samantha has taken the bold move to enlist the support of apartment livers (people who own and live in apartments) to ensure that there is a more balanced discussion.

“When I witnessed Councils changing Town Planning Schemes and rejecting apartment projects based on what I call, 0.0006% of the population, I decided that something had to change,” Ms Reece said.

“I know for a fact that there are people who love their apartment and would like more choice but they are being hamstrung by people who would prefer to maintain the status quo.

“There have been mandates from State Government for Councils to nominate areas where apartments are a good fit and that is ideally around train stations, retail and on major roads.

“If people speak up about the fact that they want to see more choice then maybe the Councils and Government will have the confidence to make bold decisions, which reflect the needs of their entire community.”

The WAAA is encouraging people to register on their website www.waaa.net.au so that their ideas can be shared with decision makers.

“I have had young people state that they would like to see smaller apartments introduced into Perth, because all they really need is a place to sleep.” Ms Reece said.

“On the other hand I have had families ask why we don’t offer four bedroom and two bathroom apartments like we see in Singapore.

“This is the kind of information that needs to be brought to light so that planning decisions provide real choice.”

Sean Morrison is one of those young people who recently purchased an apartment by NIB Stadium.

“I have exchanged a one hour drive into the City each day for a 20 minute leisurely stroll to work,” Mr Morrison said.

“I literally fill my car just twice a month and that for me is both sustainable and cost effective.

“Because of the reduced travel time I believe I am more productive at work and I also have more free time to enjoy.  It is this quality of life that I really appreciate.”

Scarborough shows robust apartment results

Because PropertyESP was looking at Fremantle recently, we decided to cast our eyes north and look at the apartment sales for Scarborough for 2010-2016.

We looked specifically in the area nominated by the MRA for redevelopment, in which there were 211 sales of apartment houses.  While there was a peak in 2013/14, the Scarborough apartment market has been achieving about 30 sales per annum.

Interestingly when looking at the apartment amenities we found that 99% of the apartments sold had a pool and secure parking, with 50% of these sales also including a sauna and gym.

3 bed/2 bath apartments accounted for 114 sales (the bulk) while 2 bed apartments were the next most popular with 80 sales.

But what was interesting to note, is that the Scarborough apartment price has gradually grown since 2013 after reaching a peak of over $1.4 million in 2010.  The 2016 median price is now at $1.1 million.

And in the 2011-2015 period, the Scarborough apartment market has achieved capital growth of 15%.  However when you look at 3 bedroom 2 bathroom apartments alone, these have achieved 28% capital growth over the same period, which is evident in the below graph.

scarborough

Unlike other coastal locations, Scarborough property does not yet demonstrate a premium for ocean edge over ocean front properties.  PropertyESP is somewhat confident however that as developers grab those ocean edge blocks, this price variation will come to play and hence anyone buying into the market place would be hoping for that uplift (which in Fremantle is 13% premium difference).

Once again the apartment market in this location is showing that since 2011 it has been in a steady pattern and in fact for the 3 bedroom 2 bathroom apartments, is recovering very nicely.

If you would like to see the full results for Scarborough then contact PropertyESP on 0452 067 117 and organise a presentation – because you won’t see this data anywhere else.

We are known, after all, for making sense of property!

 

River and Ocean Views Command a Premium, but there’s more to it than that

Perth has long had a love affair with the Swan River and its wonderful beaches, and that is strongly reflected in property prices.

And you don’t have to be an analyst to know that properties in riverside and beachside suburbs tend to dictate higher prices and those that command views, achieve even higher prices again.

We’ve long thought of this as a view factor … and it’s true that a great view commands a premium price.

However, recent analysis performed by PropertyESP has found that it’s even a little more complicated than that.

We have recently been focusing on the apartment market in North Fremantle, South Fremantle and North Coogee … all suburbs in close proximity to the ocean or the Swan River.

What we found is that, within the water-front properties there was a distinction between those on the edge of the water and those a little further away.

In fact, properties at the water’s edge commanded a 20% (for river edge) and 13% (for ocean edge) premium in price per square metre over their ocean front counterparts.

Water’s edge properties are those properties where there is little more than a footpath or a cycle path separating the property from the riverbank or the beach.  You could walk out the front door carrying an afternoon bevvy and sit at the water’s edge to watch the passing flotilla or birdlife.

Ocean front properties on the other hand are those where there’s a little more to negotiate between the front door and the riverbank or beach when carrying your bevvy (and you may want to be wearing a little more than your swimwear).

They still have the views that people pay a premium for, but when you walk out the front door there’s a major road (likely to be busy in summer) to cross before you get to the water.

And whilst the size of the price premium varied for different sized apartments (1 bed, 2 bed and 3 bed) and in different suburbs, for the most part this rule held true.  When it didn’t, there were other factors at play, such as differences in the mix of properties for sale  etc.

So what’s the big deal?

This extra factor is something that some developers can work to their advantage with the right property.  And at PropertyESP we are all about maximising price!

The MRA’s Scarborough Redevelopment has already catalyst sales of new and modern ocean front apartment houses.

But watch carefully.  There’s the potential a little further down the coast for some interesting development …

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.