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Apartment prices ‘sensitive’

DEVELOPERS need to be aware of the price sensitivity of inner city apartments.

They, along with marketers and sales agencies in the inner city, seem to have forgotten the lessons of the early 1990s, Inner City Housing Developers Association president Derwent Southern says.

“Little has changed in the need to keep unit prices affordable for the majority of people who find central city living attractive,” he said.

Mr Southern was responding to reports indicating a slow down in inner city sales.

“Projects that were not based on a clear understanding of the market and the potential buyers ran the risk of not selling as fast as some financiers would like,” he said.

He said it was important that apartments worth about $200,000 were available on the market.

“In the past two years there had been a trend to more expensive homes, often in high-rise developments with their additional operating costs,” Mr Southern said.

“Whether purchasing or renting the initial purchase costs as well as the operating costs have a major impact of the ability of people to enjoy living in the city.

“Developers who ignore the residents’ motivation for living in the city can expect slower sales rates and a perception in some minds that the market is oversupplied.”

He believed 80 per cent of potential demand was for properties valued at less than $220,000.

“Pioneers in the Perth and Fremantle inner city residential market were very conscious of this price sensitivity,” he said.

“Developments like Park Lane in Northbridge and Park View in Wellington Street are examples of a solid product sold at the right price that continue to

provide lifestyle and value benefits.” Meanwhile, Heytesbury Group executive manager reserach and development Dr William Ryan has denied reports the Janet Holmes a Court Gallery East Perth development did not have a sale for six months.

“There were 14 apartments sold off the plan between December, 1998 and December, 1999 and since January there have been four sales – three new apartment and one re-sale,” Dr Ryan said.

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