Perth’s new apartment listings are selling quickly due to strong population growth and buyer confidence, a new report showed.
Despite challenging conditions, the Urbis Apartment Essentials report showed steady sales in Q1 2024, with 248 sales recorded, the highest since Q4 2022.
“We are still seeing a lot of demand for new apartments,” said Urbis Director David Cresp (pictured above).
Currently, only 441 newly built apartments are available for sale, a significant drop from 1,518 in Q3 2021.
“In some developments, the developer has chosen to take the rental returns or are holding back stock due to the price increases we are now seeing,” Cresp said.
Apartment approvals and new project launches have been low.
Only 453 apartments were approved in 2023, the lowest since 2009. However, approvals improved in Q1 2024, with 508 apartments approved, the Perth Apartment Essentials Report found.
“It has been very difficult to make new apartment developments viable over the past two years,” Cresp said.
Construction costs remain a concern but are beginning to stabilise, which according to Cresp, is “giving developers more certainty about what construction costs will look like.”
In Q1 2024, four projects with 569 apartments commenced construction, indicating growing developer confidence.
Perth’s rising house prices, with a 21% annual increase, make apartments more attractive. The weighted average price for new apartments in Q1 2024 was just more than $1 million.
“We are starting to see a more diverse range of product being sold this year compared to 2023,” Cresp said.
2024 will see a high level of apartment completions in Perth, with 2,649 apartments expected to be completed.
“Though we expect to see a lot of stock settle this year, 70% of apartments under construction have already been sold,” Cresp said.
However, completions are expected to drop to 732 in 2025, highlighting ongoing supply issues, Urbis Perth Apartment Essentials reported.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
