Foreign buyers are not having a significant impact on Perth’s apartment market, with fresh research by Urbis showing they only make up around 7 per cent of buyers.
The research is part of Urbis’s newly established quarterly Apartment Essentials report, which examines the state of supply and demand in one of the city’s most talked-about sectors.
The report, which was compiled by surveying Perth’s top developers, showed Perth lagged other Australian capitals in attracting offshore investors, with the vast majority of apartments being purchased by local buyers.
“A very strong factor when you look at the Perth market is the local support that it gets,” Mr Cresp told Business News.
“Sales have been very strong in Brisbane, but a lot of them have been to interstate (Sydney and Melbourne) buyers and a high proportion have been to overseas buyers, whereas the Perth market has been very strongly supported by locals.”
Mr Cresp said the report also helped to dispel the other common myth in the apartment market – that Perth was heading into an oversupply of multi-residential dwellings.
The report showed there are currently 4,279 apartments under construction, 68 per cent of which are subject to binding sales contracts.
Instead of fearing oversupply, Mr Cresp said he expected demand for apartments to continue to grow in coming years, due to high house and land prices, shifting demographics, and increased immigration.
The affordability and location of apartments was a large factor in the increased demand, with between $400,000 and $550,000 enough to buy an apartment in the inner city or in near-city coastal areas.
Conversely, that same amount is enough to afford a house that would involve a commute exceeding 20 kilometres from the CBD.
Mr Cresp said it would cost around $130 per week in petrol to commute to the CBD from the urban fringe, equating to repayments for a $100,000 loan.
He said the perceptions of oversupply in Perth largely stemmed from the large number of approvals issued in recent years.
“There are multiple-stage projects that might be getting an approval now, but that last stage might not be selling for five years, or in some cases even more,” Mr Cresp said.
“You can add everything up that’s getting approved and you can come up with big numbers, but that’s not all going to come at once.”
Mr Cresp said the other factor fuelling the oversupply debate was the visible nature of apartment projects, compared with housing.
Last year, Australian Bureau of Statistics building approvals figures showed just 17 per cent of dwellings approved in Western Australia were apartments.
In Sydney, 55 per cent of dwelling approvals were in the multi-residential sector, compared with 37 per cent in Melbourne and 50 per cent in Brisbane.
“Apartments are really visible and people see them every day,” Mr Cresp said.
“People can’t see the 20,000 houses that are getting built, because they are out on the urban fringe.
“You might drive past them on the road and see 20 of them but you don’t see behind that there are hundreds more being built.”