Perth apartment approvals down 68%

There were 666 apartment approvals in inner Perth for the 12 months to February, a sharp fall from 2,069 in the prior corresponding period, which could driven by high supply in a weak market, according to a new report.

The latest JLL Apartment Market Report revealed 1,300 new apartments are expected to hit the market in 2019, compared to 499 in 2018, and a further 1,900 could potentially be completed in 2020.

In the first quarter of this calendar year the Element 27 in Subiaco, M/25 in Mount Lawley, Reva Apartments in South Perth and Botanical in Subiaco were all completed, equating to a total of 260 apartments.

Currently about 2,134 apartments across 12 projects are under construction within inner Perth, with seven expected to be complete this calendar year and the remaining in 2020.

“However some projects could easily slip into later years or be abandoned if sufficient presales are not achieved,” the report warned.

State final demand fell by 1.6 per cent for 2018, stemming from declines in private investment, according to the report.

The report states the significant decrease in apartment approvals could be attributable to developers’ cautiousness regarding the already high level of supply in the pipeline in a still shallow market.

However in the medium term, the report suggested that WA’s economy will bounce back in the medium-term, citing Deloitte Access Economics’ forecast of 3.8 per cent growth in state final demand for 2020.

In 2018, sales of apartments in inner Perth fell by 5.5 per cent to 2,010 compared to 2017.

The median price declined by 6.9 per cent to $372,500, but the median asking rent rose by 4.3 to $365 per week.