Prices and sales of apartments are stable, but developers are calling for more stamp duty reform.

Western Australia’s property developers hope the physical isolation that has helped mitigate the worst of COVID-19 in this state will also insulate the local apartment market from a contagion of a different kind.

While sales of off-the-plan apartments on the east coast are reportedly down 15 per cent or more in recent weeks, that trend is yet to fully materialise in Perth, at least anecdotally.

Apartments in central Perth have remained relatively resilient during the past three years in terms of maintaining their resale values, according to research analysts PropertyESP.

Director Samantha Reece said this resilience, paired with Perth’s location, had so far buffered the market from the economic fallout of COVID-19.

“For the first time in history we are actually glad that we’re isolated,” Ms Reece told Business News.

“While there will be some national companies that feel the effect from the east coast – there is a bit more of a lag happening there than here – those companies based in WA, I believe, will actually continue on business as usual.”

That appears to be the case for Subiaco-based Stirling Capital, which recently achieved practical completion at its 26 on Charles mixed-use development in South Perth.

Stirling Capital sales and marketing director Daniel-Paul Filippi said just a small number of the 28 boutique apartments and four levels of commercial office space remained for sale.

“In terms of valuations, we’ve had zero impact,” Mr Filippi told Business News.

“I’ve had all the major valuers through our Charles Street project and we’ve had no problem.

“People are waiting to see if there’s going to be those sorts of big drops that have been reported [on the east coast]. We didn’t have a lot of foreign buyers anyway, so I don’t see as much impact.”
Mr Filippi said the market’s saving grace could be the resources sector, as one of the key drivers of the state’s economic activity.

“The fact is, WA is still ticking along, so everything is indicating that maybe WA and Darwin will be the least affected by all of this,” he said.

M/Group managing director Lloyd Clark said there had been less disruption on projects than initially anticipated, with inquiries returning just as quickly as Perth moved through the easing of restrictions. Mr Clark said inquiries had also tended to be more qualified and ready to buy.

Given that market confidence, the group is pushing ahead with plans to start construction on its M/27 apartment development in Fremantle.

“In terms of valuation, Perth is in a unique position comparative to the rest of Australia,” Mr Clark said.

“Our property values were already at the lower end of the property cycle, and apartment prices currently represent excellent value for money.

“While the fallout of the pandemic might create value variances in other states, I believe it is unlikely in Perth.

“In light of the activity over the last few months, I would expect to see apartment prices on our projects hold as the market restabilises and returns to growth in 2021.”

M/Group is progressing plans to start construction on its M/27 40-apartment development in Fremantle.

Apartment developer Paul Blackburne is also expecting prices to remain steady, and said COVID-19 had not yet affected sales, with most of his apartment stock already sold.

Blackburne’s Marina East development, located in Ascot Waters, finished construction in May with 80 per cent of apartments sold.

“The past 12 months have been our highest-selling year on record with $203 million in sales in just the first nine months,” Mr Blackburne told Business News.

“Now that things are opening up more and the major threat of the crisis is most likely over, people have started buying in larger volumes.

“Prices had gone up for four months in a row. The next year would have seen 3 to 5 per cent growth.”

Outlook Data compiled by real estate services firm JLL revealed that apartment sales in the inner city were down 3.9 per cent in the 12 months to the fourth quarter of 2019.

However, apartment sales activity was up 12.5 per cent in the fourth quarter on the preceding three months.

JLL manager of strategic research Ronak Bhimjiani said this had most likely been fuelled by the 75 per cent stamp duty rebate on off-the-plan purchases.

Additionally, Mr Bhimjiani said apartment values increased by 1.7 per cent in Perth between November 2019 and February 2020, a figure not seen since mid-2013 during the peak of the resources boom.

“The long-awaited recovery in Perth’s apartment market is likely to be delayed, as COVID-19 keeps conditions challenging in the short term,” he said.

“However, it is important to note that current economic and property market data does not yet fully capture the full impact of COVID-19.”

Any anticipated drop in demand could be partially offset by supply, with construction expected to cool off beyond 2020.

Mr Bhimjiani said there were about 380 apartments across a handful of smaller boutique developments likely to be completed in 2021.

Meanwhile, for larger developments previously set for 2021 completion, he said project timelines had been pushed out to 2022, with further economic uncertainty potentially limiting new starts.

“Many of these projects that are in the early stages of marketing or at the development approval stage could slip into later years or be abandoned if sufficient pre-sales are not achieved and economic conditions do not improve,” Mr Bhimjiani said.

“The impact on pricing will ultimately be dependent on the supply versus demand dynamics in the Perth apartment market.”

Finbar managing director Darren Pateman said stamp duty relief would be the best way to boast sales and development activity.

The ASX-listed property development company recently announced it had completed construction of its One Kennedy Maylands project, with sales of $23.5 million secured to date, representing 43 per cent of apartments.

Mr Pateman said there hadn’t been any immediate shift in apartment values, with all recent Finbar contracts at pre-COVID-19 pricing.

“The Perth market was already at one of its most affordable levels pre-COVID, in contrast perhaps to eastern states markets, which were experiencing far higher levels of growth,” Mr Pateman told Business News.

“WA has done it tough for near on five years and pre-COVID we were clearly entering a recovery phase, while eastern states markets have been boiling over for some time.

“Extending the stamp duty rebate beyond off-the-plan sales to projects under construction and new completed stock to encourage commencements will allow vital capital to be redirected to new job creating projects for thousands of Western Australians.”

Mr Pateman said this would help revive the WA economy as it moved into the recovery phase post COVID-19.

Mr Blackburne shared similar thoughts and said further stamp duty reform could also lead to long-term reductions in local council rates, with the greater rates flowing from higher-density developments better supporting council operations and budgets.

Mr Clark agreed and said the role of government was critical to maintaining buyer confidence, which could be achieved by additional stamp duty relief by way of rebate or discount.

“This is about keeping the market moving in the right direction and buyer incentives are proven and successful in this space,” he said.

“Government and industry alike have a significant role to play here.”

Business News – Katie McDonald, Thursday, 4 June, 2020

A new building services group is creating opportunities to boost Aboriginal employment in construction.

Gerard Matera is helping turn positive sentiment around Aboriginal reconciliation in the business community into genuine change through indigenous-owned building company Marawar.

Mr Matera, brother of former West Coast Eagles players Peter and Phil Matera, established Marawar Building Services about 12 months ago, responding to what he believed was a gap in the building and construction market.

Mr Matera told Business News that while there were widespread opportunities for Aboriginal people to engage in the mining industry in Western Australia, there was little participation in building and construction, particularly in Perth and the South West.

“In WA, there are approximately 33,000 apprentices in training,” he said.

“Out of those figures, only 741 apprentices are Aboriginal.

“And in Perth and the South West, in Nyoongar country, there are fewer than 90 Aboriginal people in the building trades.”

Mr Matera said there was considerable opportunity to increase participation, with large corporates and government agencies increasingly seeking better engagement with Aboriginal-owned businesses.

However, despite a willingness to engage, he said there had been challenges in turning sentiment into opportunity.

“A lot of the companies that are participating in government contracts and the private sector generally have some sort of achievement document or Reconciliation Action Plan, or some sort of guidelines that say they want to engage meaningfully with Aboriginal people on construction jobs, but no-one is policing it, no-one is really making sure that they are engaging and it is meaningful,” he said.

“A lot of times there is reluctance to give a contract to an Aboriginal business; it’s usually entry-level contracts that don’t really make a big difference.

“I’m looking for long-term contracts where I can employ tradies and apprentices, which is what we set out to do in the first place.

Mr Matera said his aim for Marawar, which is 50 per cent owned by building and development firm M/Group, was to become the WA building industry’s biggest employer of Aboriginal people.

“At the moment we are sitting at about 40 per cent Aboriginal participation, and that is through apprenticeships and traineeships,” Mr Matera told Business News.

“We are also employing Aboriginal tradies who are taking on an Aboriginal apprentice, which I think is really key.

“I don’t think anyone other than us is actually putting together an Aboriginal apprentice with an Aboriginal tradie. It makes a massive difference.”

Marawar recently signed a major contract that goes some way to achieving the company’s lofty goal, collaborating with M/Group’s M/Construction to build a Bunnings Warehouse in Albany on behalf of Wesfarmers.

That deal was followed by a contract with another Wesfarmers-owned brand, Officeworks, to refurbish and paint all of its stores in WA.

Marawar is also building social housing for the Department of Communities, a deal that Mr Matera said made the company the first Aboriginal-owned business in WA to build multi-storey apartment projects for people on social welfare.

In December, Marawar signed two more significant deals to provide maintenance work for the Department of Finance.

Along with the job opportunities, Mr Matera said Marawar was helping to dismiss negative perceptions of indigenous work ethic and Aboriginal-owned businesses.

“A lot of people think that Aboriginal businesses just get awarded these contracts, but you actually don’t,” he said.

“You have to be competitive and commercial and provide the right quality.

“Yes, we tick a box in that we are an Aboriginal business, but you can’t be more expensive and you can’t provide a crap service. It’s the same process.

“Being Aboriginal, and I’ve felt this personally, I think the client always thinks that we are not going to provide a good service and we are not going to provide quality.

“So there is a constant effort to try and change people’s perceptions of what an Aboriginal business actually is and what it can provide.”

M/Group managing director Lloyd Clark said the joint ownership of Marawar provided far-reaching benefits across the company’s entire operation.

“The introduction of Marawar has not only been embraced by the Perth business sector, it has also engendered a sense of purpose within our staff environment,” Mr Clark told Business News.

“Suddenly our work has taken on greater significance and there is a new level of pride in what we are achieving.”

Dan Wilkie, Business News

We are pleased to announce that Match was part of the OUR TOWN Fremantle episode that aired on Channel 7 & GWN7 on the 24th August 2019, which featured Heirloom by Match & M/27 Apartments by Match.

Property company, M/Group, has submitted a development application (DA) to the City of Albany that could introduce a Bunnings Warehouse to the Chester Pass Mall shopping precinct.

Approval of the application would see the existing Bunnings currently located on Albany Highway relocate to a 14,000sq.m purpose-designed space. A number of additional improvements to Chester Pass Mall would also be made, including carpark shelters and upgrades by other retailers.

M/Group Director, Mr James Collis, said introducing a new Bunnings to the area will be a welcome addition to the precinct and could expand Chester Pass Mall’s its catchment across Great Southern region.

“In addition to the 35,000 people within Albany, we anticipate that families throughout the Greater Southern region will travel long distances to shop here. This puts Chester Pass Mall in an extremely unique position and could provide benefits to all businesses in Albany,” he said.

“The approval of our development application would create a shopping experience that complements surrounding retail found along Chester Pass Mall and offers improved traffic management and parking to home improvement customers.”

Bunnings Director of Property Andrew Marks said should the development application be approved the new store will provide Albany residents with an even wider range of home improvement and outdoor living products in a bigger and better store.

“The new Bunnings Warehouse development will feature a fully enclosed timber yard, nursery, more car parking for our customers as well as offering job opportunities for local residents.

“All of our team members from the existing Albany store will transfer to the new store once complete and will continue to be on hand to provide customers with expert advice on their D.I.Y projects.

M/Group National Shopping Centre Manager, Ms Cherie Daly, said she is confident that a Bunnings in the area will be welcomed by the community.

“I’ve no doubt that a larger Bunnings will be welcomed by both the local and extended community,” she said.

“Should our DA plans be approved, Albany would see an injection of $15 million of investment during the construction phase alone.”

While a Chester Pass mall centre refurbishment is also being strategised for the longer-term future, plans are yet to be confirmed.