THE local property market may be in the doldrums, but boutique property developers and builders are targeting niche markets to take advantage of Perth’s changing property landscape.
THE local property market may be in the doldrums, but boutique property developers and builders are targeting niche markets to take advantage of Perth’s changing property landscape.
Psaros Property Group, Qube Property Group and Match Property Group are among the prominent mid-tier players in Perth that have focused their energy into providing increased affordability for buyers.
For almost 30 years, Psaros Property Group has been developing and building mixed-used developments and luxury housing, with a focus on apartments in inner-city locations.
Managing director Danny Psaros said affordability had become a key issue, with cheaper products such as one-bedroom apartments proving attractive.
The Psaros Group has targeted buyers seeking an inner-city lifestyle close to transport and restaurants, but at an affordable price point.
“Finbar, Pindan and Probuild probably wouldn’t touch the size projects that we do because they are too small for them, but our market doesn’t want to live on Adelaide Terrace,” Mr Psaros said.
He said the 45 apartments sold during the past two months sales at Psaros’ Metropol on Parry project in Perth showed the value of accurate and affordable pricing.
“Our cabbage patch is, give or take one kilometre from the city and that’s as good a product as you’re going to get for that price and that’s why they’re selling so well,” Mr Psaros said.
“An issue that we are all up against is that if you are around the $400,000 mark you can make sales, but if that goes to $500,000 you have wiped out a lot of that market.”
Match managing director Lloyd Clark said it was important to choose sites close to good local amenities.
During the past five years, Match has focused on developing and building apartments and townhouses in the Fremantle area.
“Fremantle is an area that provides tremendous amenity and endless development opportunities ... we believe it’s an area that our target market wants to live,” Mr Clark said.
He said Match targeted those who were opting for a ‘lifestyle’ rather than ‘traditional estate living’ and also investors looking to tap into the rental market.
“Apartment living has definitely entered a new era, it’s no longer seen merely as an investment option, but a lifestyle choice,” Mr Clark said.
For the past 16 years, Qube Property Group has opted for a diverse business model focusing on the acquisition of residential, commercial and apartment development opportunities through direct purchase or joint venture.
“Our diversified investment strategy promotes a mixture of commercial office development, for long-term rental income and capital return, whereas our investment in residential land subdivision and apartment development is to develop and sell in the shorter term,” Qube managing director Mark Hector said.
In addition to commercial and apartment projects in West Perth and Subiaco, Qube has expanded its business to include rural living developments on the city fringe.
“We saw a very good opportunity for that tree change market, so someone wanting a change from suburbia can look to run a few horses and experience that rural lifestyle,” Mr Hector said.
He said the land subdivision market was going well, but commercial development was certainly stronger as a result of the lack of supply of quality office accommodation stemming from the GFC.
However the biggest challenge according to Mr Hector is the bureaucratic approvals system and red tape relating to land subdivision.
“I have seen three- to four-fold increases in the approval process over the past 15 years and that has impacted directly on affordability,” he said.
Mr Hector said the approvals process facing the development of apartments was much less rigid than that of land subdivision provided the relevant council was flexible.
“You find some local authorities that are very pro-active and some that are very obstructive,” he said.
Messrs Clark and Hector agreed that competitive building prices meant the timing was right for the development of new projects.
“At the moment it’s a good time to be building because there is a downturn in construction activity and builders are very competitive with their prices,” Mr Hector said.
Mr Clark said it was a good time to buy land at very competitive prices in great locations and take advantage of much lower-priced construction.
However, Psaros Group general manager Mike Enslin was not so optimistic about the cost of building.
“Along with affordability, the next big challenge is construction costs and land costs, which have gone up,” Mr Enslin said.
