Established Perth apartment blocks in high demand
While house prices in the WA capital have declined for six consecutive quarters, demand for older-style apartment buildings is rapidly escalating.
Small blocks of older-style apartments in Perth's fringe CBD suburbs are becoming one of the hottest investment tickets in town, according to leading agent Knight Frank.
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Knight Frank has reportedly sold more than $20 million worth of apartment blocks in the last 12 months, across suburbs ranging from South Perth, Inglewood, Jolimont and Daglish.
They have ranged in price from $1.2 million to more than $6.5 million, and have extended to suburbs as far from the CBD as Shoalwater.
Knight Frank's senior director of capital markets in Western Australia, Todd Schaffer, said demand for older-style apartments had escalated significantly in recent months and the trend was set to continue.
“Each sale has been hotly contested by a range of potential buyers, from individual investors through to small family companies,” Mr Schaffer said.
According to Mr Schaffer, more than 90 per cent of sales negotiated by Knight Frank had been cash, unconditional deals.
“The sales are primarily coming from apartment blocks in established residential areas where there is little or no scope for larger scale residential redevelopment on the site,” he said.
“Buyers are recognising the value in these properties and are opting to either hold or refurbish them and establish long-term, strong, reliable cashflows, with future development.”
