Off-the-plan sales up

PROPERTY investors are increasingly buying and reselling off plan at a profit before the completion of the project, according to Hegney Property Valuations.

The company’s managing director, Stewart Kestel, said these type of investors had emerged as a new trend in the Perth real estate market, revealing that well-located new residential developments were achieving strong capital growth rates before the projects were even completed.

“Our research shows, for example, that a new development in Labouchere Road, South Perth, has experienced a $50,000 jump in property values while the project has been under construction,” Mr Kestel said.

He said a one-bedroom one-bathroom plus study apartment, which originally sold off the plan for $260,000, had recently been resold for $310,000.

Another unit, which was sold off the plan for $360,000, had recently resold off the plan for $413,000.

“Our research indicates that well-located apartment complexes that offer lifestyle facilities will achieve strong capital growth during the coming decade in Perth,” Mr Kestel said.

There was a growing number of speculative investors buying off-the-plan apartments in the belief they will make substantial capital gains during the time of construction, based on an initial minimum deposit, he said.

Currently, there are more than 1,000 properties being offered for sale off the plan in Perth, with many of these priced above $300,000.