property rentals – PropertyESP

Flight to bigger apartments evident

The first poll research of its kind in WA, with 268 apartment residents (owner occupiers and renters) has shown a real appetite for larger apartments.

The WA Apartment Advocacy (WAAA) data has demonstrated that 35% of renters moved from a two bedroom and 26% from three bedroom properties into one (35%) and two (34%) bedroom apartments. But asked what would they move into next, 48% said two bedroom and 38% indicated three bedroom properties.

This was mirrored by the owner occupiers as well, with 35% moving from a three bedroom property and 39% from a four bedroom into predominantly two bedroom apartments (64%). However, when thinking about their next move, 33% would move into a two bedroom and 53% into a three bedroom property.

The research demonstrates that the need for a third bedroom was driven by resident’s usage of the space in their apartments, with 61% of owner occupiers and 48% of renters, using a bedroom as a study or a study nook in their apartment.

For some time now, the WA apartment market has been focused on one and two bedroom apartments but this data gives food for thought to both developers and investors alike.

At PropertyESP we tend to concur with WAAA in that baby boomers should no longer be called downsizers but more aptly right sizers and up-stylers.

Why? Because these people have been typically living in their family home for 25 years and so what they are seeking is a spacious apartment with all the mod cons.

While apartment analysis to date has been focusing on what has been selling – this data tells us what the next market trend is. Those that are wise will take note!

Applecross apartments defy the norm

We recently conducted some research on behalf of a client of ours examining what was happening in the apartment market in Applecross and Mt Pleasant from 2011-2016. This data was very interesting because despite having some initial setbacks, these two suburbs have once again rebounded.

Looking at 164 apartment sales in the five year period, the analysis showed that the median sale price in Applecross in 2011 was $875,000 and peaked at $1,250,000 in 2014 before settling at $1.1 million at the end of 2016.

Mt Pleasant apartment sales on the other hand started at median price point of $1,125,000 in 2011 before plummeting to $660,000 in 2013 before then rising again to $1,195,000 in 2016.

The data also demonstrated that regardless of one, two or three bedroom apartments, there was an upswing in the median property price for both Applecross and Mt Pleasant in 2016.

But what was most surprising was that being on the rivers edge (no road in front) or river front (with a road in front) reflected no price difference and as such we believe that this a paradigm that will definitely shift in years to come with the $235 million Canning Bridge redevelopment.

The data also demonstrated that rental yields were approximately 4.2% for apartments compared to 3.3% for houses in these areas.

As you can imagine this company now has good news to share with its buyers and that will only build confidence.

If you want to know what is happening in your suburb than contact the team at PropertyESP. We delve into the nitty gritty and unveil good news!

Renters seek more

The WA Apartment survey – the first of its kind in WA – recently interviewed 113 renters who have shown that while apartments are their preference, they are seeking more in terms of amenities and space.

The survey showed that 39% moved from a house into an apartment and went from 2-3 bedrooms to 1-2 bedrooms.

However when asked what they would choose next, while 73% said they would consider an apartment, their preferences were clearly for 2-3 bedrooms. This linked to the fact that 20% were using a bedroom as a study/home office.

Convenience was also a major driver when choosing an apartment, with 91% of the renters in walking distance to public transport, 90% to cafes, 86% to a grocery shop and 84% to services such as hairdressers.

Renters also tended to look first for apartments in Perth, East Perth and West Perth before then expanding out to encompass Mt Lawley, South Perth, Highgate, Subiaco, Leederville and Northbridge. This was because most renters wanted to have a direct route to work, with 86% stating the travel time to work influenced their decision when choosing an apartment.

84% also indicated that safety and security was a major influence in their renting decisions along with being able to lock up and leave, low maintenance and affordability (75% respectively).

However what was also interesting, was that while 44% had no prior experience living in an apartment, 82% would still recommend apartment living.

There is no doubt that apartment living is becoming an evolving trend for renters, but just like owner occupiers – bigger is better!

If you are keen to learn the full results of the WAAA survey (and guarantee your investment success) contact Samantha Reece on 0452 067 117. You can be assured you won’t find this level of information anywhere else!

Rental rates on the rise

So as PropertyESP was looking at various suburbs in Perth, we saw a growing trend of rental occupancy, from the 2001 to 2011 census.

This made us wonder, was this movement confined to just these suburbs, or was it in fact occurring across the whole of Perth?

There is no doubt that we had been looking at modern suburbs such as East Perth, Cockburn Central and Ellenbrook when we discovered this increasing rate of rental occupancy, and as such we thought that the age of a suburb, maybe had some influence over this trend.

So we decided to pull some random suburbs dating from 1950 through to 2000’s to see if there was in fact any indicators just waiting to be revealed. These suburbs included Booragoon, Innaloo, Dianella, Bullcreek, Aubin Grove and Banksia Grove, to name just a few (20 in total).

What we found was that this random sample of suburbs all experienced an increase in rental occupancies from 2001-2011 census (see table 1). Some eras such as the 1980’s and 1990’s jumped from 10% rentals to 16% during this ten year period, while the majority averaged 3-4% growth.

Table 1

Could it be possible that these 1980/90’s homes had been vacated by their baby boomer owners as they upgraded, and as such were now being treated as an investment?

In conjunction, with Y Gen being somewhat transient, this was another possible contributor for the increasing rental occupancies across the board.

And of course there are hotspots, such as South Perth, where the rental market represents a much larger proportion ie 46% and with strong development occurring in that locale, I believe this number will only grow.

But one thing is for certain, rental occupancy is on the rise and this shows once again that the dynamics of Perth’s property cycle is continuing to evolve and that is a good thing.

PropertyESP is a company that likes to get into the nitty gritty of sales data. If you are wanting a full and detailed snapshot of sales for an area, then contact PropertyESP today to find out more!