Longer selling and leasing times in real estate market as residential supply cycle draws to an end.
Colliers International hosted a Residential Market Update at its Perth head office where developers and investors were briefed on the forecast for WA’s much-watched residential housing market.
Colliers International Director Valuation and Advisory Services John Del Dosso told the gathering that the delivery phase of Perth’s current residential supply cycle, which will see close to 30,000 dwellings completed by June 2017, had coincided with slower population growth and weaker business and employment conditions.
“This timing has created a market place with more accommodation choice for leasing and buying and with no compulsion on occupiers to act, is leading to longer selling and leasing periods and downward pricing pressure,” Mr Del Dosso said.
Despite the headwind of weaker demand, Mr Del Dosso said there was still fair demand for well-located housing estates and apartments.
“With changing demographics and general market conditions, suburbs within a 20km radius of the CBD are becoming more desirable, particularly for renters who are finding more affordable options,” he said.
“For developers who secure a site that has amenity, which is close to transport and with the right price and product, there will still be turnover.”
In many of the older suburbs Mr Del Dosso said there was pent up demand for alternative dwelling choices that would increase housing options for young adults and downsizers.
He said Perth had grown out to its limits and was now growing back into the core as the city matures.
“In the short-term this will underpin reasonable demand for infill locations within a 5-20km radius of the CBD, particularly those close to employment nodes and with high levels of amenity and good transport links,” he said.
“Many infill opportunities remain in former commercial and industrial precincts that have been encircled by residential development and in failing local centres that are crying out for mixed-use redevelopments.
“Redundant and underutilised state and local government sites will also be an important source of infill locations in the future.
Mr Del Dosso said these sites were usually within aging communities that had moved through full family life cycles and were now ripe for gentrification.
“The strong population growth of the past 15 years has also created a wave of young adults who live and work differently to past norms and are seeking alternate accommodation choices in locations that offer a lively and connected live – work – and recreate lifestyle.”