Luxury apartment buyers and investors from the eastern states are flocking to Perth amid COVID concerns, fuelling a boom in the west.
Perth developer Paul Blackburne said he had experienced a strong uptick in inquiries and sales from buyers in Victoria during the current hard lockdown, including a Melbourne couple who are paying $1.8m for an off-the-plan apartment in his $280m One Subiaco project sight unseen.
“Like many Victorians they had planned to retire to Queensland but bought this apartment without visiting Perth because they now want to move here instead in a couple of years,” Mr Blackburne said.
“With our property prices now so low, good weather and more vibrant city they decided Perth was the best place to spend their retirement. We’re in a bubble in WA, and the market has gone from warm to hot.“
Mr Blackburne, a member of The List — Australia’s Richest 250, will on Friday announce Brookfield Multiplex as the builder of One Subiaco, on the old Subiaco Markets site.
His eponymous firm has pre-sold more than 80 per cent of the 245-unit site despite the COVID pandemic, surpassing the amount needed to get started.
“Some people said this wouldn’t happen. However, with $200m already sold we have proved them wrong and shown there is always strong demand for good projects in prime areas. Best of all it is creating 1000 new jobs, so it feels good to be backing the WA economy,” Mr Blackburne said.
Multiplex will build the project six months ahead of usual practice as Mr Blackburne rushes to take advantage of Perth’s strong market, in which local owner-occupiers used to having the market to themselves are now competing with investors and buyers from the east.
Blackburne Property will also accelerate the launch of its new $360m The Grove project on the border of upmarket Peppermint Grove and Cottlesloe in Claremont.
“In WA now things are better than pre-COVID (and) we have seen a big increase in inquiry and buyers from Melbourne and Sydney,” Mr Blackburne said.
“The state and federal stimulus has been significant. Our markets had already corrected over the past five years and were at the beginning of the growth phase, so the stimulus has just added fuel to the fire.
“The past few months have been some of our best yet and we will be putting prices up. There is a shortage of larger high-end apartments in prime areas, so we expect to increase prices each quarter this year. It’s an exciting time for WA.”
Mr Blackburne said the Perth market, long in the doldrums compared to other states but now forecast to be the nation’s strongest, was attracting investors.
“We are also still seeing growth in the savvy investors that understand property cycles. Perth property is now cheaper than 10 years ago and history shows that is the time to buy.
“Our economy is improving and rents are still increasing.
“We manage 1000 properties in Perth and are budgeting on 15 per cent rent increases over the next three years.”