This article is from the Australian Property Journal archive
STRONG sales at Finbar’s controversial $408 million Civic Heart apartment tower in South Perth have prompted the developer to begin earthworks at the project site in January, while the city’s tightening rental market has helped boost demand.
Finbar recorded its largest monthly sales volumes in October since July 2017, with 47 apartments selling at a value of $31.3 million.
Civic Heart has now seen 60 sales, to the value of $59 million, prompting the decision to begin earth works at the start of 2021.
Finbar managing director, Darren Pateman, said Perth’s tightening rental market, which is currently recording its lowest vacancy levels in 30 years, was driving buyer demand and seeing the cautious return of investors to the market.
Perth’s residential vacancy rate has been crunched to 0.96%, according to the Real Estate Institute of Western Australia. Stock levels continued to drop in October, and after two years of constant median rent prices there has been a $25 jump of the weekly price to $375 in just three months.
Median rent for houses increased $35 per week over the three months to $395 in that ime, and units increased $20 per week to $350.
ASX-listed Finbar has $135.8 million in debt free completed stock that is helping satisfy the immediate demand, he said.
Civic Heart will comprise two towers of 39 and 22 storeys respectively, providing 309 residential apartments, four penthouses and 25 ground floor commercial tenancies.
It is located on an 8,208 sqm site bound by Mends St, Mill Point Rd and Labouchere Rd.
The tower was launched to the market in September following Planning Minister Rita Saffioti’s approval of the project in February this year. Saffioti had used her legislative powers to call in the development application due to the significant of the site, after the Joint Development Assessment Panel’s rejection of the project. Finbar subsequently sought a review by State Administrative Tribunal.
Finbar has also recently received approval from Perth Development Assessment Panel for construction of a $92 million luxury high-rise apartment on Adelaide Tce in central Perth, despite fears the building will block lucrative river views.
Pateman said that after a prolonged absence from the Perth market, “we are currently seeing the return of investors as a result of the tight rental market and more buoyant conditions across the market in the wake of the pandemic.
“This rental market tightening coupled with record low interest rates is also encouraging tenants to enter the market as buyers which is helping with the sale of our entry level product.”
He said there was been a slight increase in foreign buyers across its portfolio “despite the ongoing negative impact of the foreign buyers’ tax”.
“While we welcome the return of investors, it will likely not happen in significant numbers until the uncertainty of the government imposed rental moratorium comes to an end in March next year.
“The return of investors is also a key element in addressing the current rental shortage across Perth which is predicted to increase in 2021,” he said.
Pateman said improved sales activity across the sector was also a result of the number of Western Australians returning from interstate and overseas and the increased economic activity taking place in the state.
