NEW REPORT OUT NOW
22/07/2013
A disconnect between the WA government and local councils needs to be addressed for Perth's property market to move forward, a CEDA property forum has heard.
Stockland, WA General Manger Residential, Col Dutton said while there is a very good strategic intent to keep up with growth rates and jobs in WA, there are definitely implementation problems.
"Honestly I think the WA structure between state and local authorities can be better, particularly in regard to infrastructure provision," he said.
"I think some of the councils need to take a more holistic view of how we're (industry and government) trying to put Perth together."
Urban Development Institute of Australia, WA, Chief Executive Officer, Debra Goostrey, said there are issues with the project approval process, citing one apartment development where 18 different agencies were involved in the process.
"Not all of those are referral agencies and it's those that aren't a referral agency, who have no statutory timelines, that are actually causing the biggest amount of grief," she said.
On industrial land, Landcorp, Chief Executive Officer, Ross Holt said it is sometimes considered the poor cousin to residential but is actually a driver of the economy.
"If WA is going to grow and become more sustainable we need a lot of employment land," he said.
The WA Government has played a more significant role in industrial land than other states and we'd like to see a bigger role for the private sector, he said.
Mr Holt acknowledged that often the private sector engages in industrial land and chops it up into small pieces to maximise the commercial return.
"That's all rational and logical but if people need large lots, logistics, warehousing…generally the private sector isn't providing that and therefore leaves the space for government," he said.
He said in terms of land supply there is space in some areas like Kwinana and Meridian Park but there are various issues around ownership, development costs and connection with infrastructure.
On commercial office space Property Council of Australia, Executive Director WA, Joe Lenzo said demand is starting to fall.
"Three years ago you couldn't get an office in the CBD; it was almost zero vacancy," he said.
Now we're probably at around seven and a half per cent vacancy, he said.
Mr Holt said he is convinced Elizabeth Quay will be a great success but getting the staging plan is critical to avoid sub-optimising.
"There's a need for government to work out what it wants (and) what are its priorities because you can't do everything at once and therefore it's a staging issue," he said.
Finbar, Managing Director, Darren Pateman agreed Elizabeth Quay will be a success due to international and multinational companies moving in because they want the best, newest building in Perth to attract and retain the best people.
On the residential market Mr Pateman said the Perth market is investor driven at the moment.
"Most of the resurgence that has occurred this year and from the middle of last year is a result of the investor returning to the market from post-GFC market which was effectively zero," he said.
The upper end of the market has not yet recovered, but sales between $650-700,000 are the strongest part of the market, he said.
For example, 60 per cent of our inner city projects are two bedroom apartments priced around $650,000, he said.
Mr Pateman said generally people don't want to live in apartments unless it is close to transport and a range of amenities.
"I'd suggest it will be those transport corridor locations that will ultimately satisfy that demand," he said.
Providing reasonably sized apartments with a parking bay that are within close proximity to the CBD is a challenge due to high land and construction costs, he said.
Ms Goostrey said the city itself would be more vibrant and active if shops were open later and there were more bars and restaurants - which would attract a certain demographic to live in the city.
"The worst thing we can do in the city of Perth is have very, very high priced apartments that only the very senior people and retirees can afford, we've got to get that diversity, a whole range of different accommodation outcomes within walking distance of the CBD," she said.
"I think we actually need to rethink what is public transport to actually set in place people's expectations," she said.
On regional development Mr Pateman from Finbar said apartments in Karratha face challenges on the market side, not in building and construction.
We're relying on the investor market as well as government to help us promote the product and incentivise their departments to be accommodative, he said.
With a project coming up in Port Hedland and another being looked at in Karratha, Mr Pateman said they're committed to the region and will be there for the long haul.