Slowing Perth market will allow supply to catch up with demand: Developer

Zoe FieldingDecember 9, 20140 min read

Slowing population growth in Perth will allow the home building industry to better keep pace with demand, according to a property developer with investments in the city.

The downturn in mining investment has curbed population growth in Perth, with the city’s growth rate easing from 3.6% to 2.5%, Cedar Woods chief executive Paul Sadleir told Property Observer.

“That is a more sustainable growth rate,” Sadleir said. “When it was running at 3.6% we were not able to keep up as an industry.”

The Housing Industry Association’s bi-annual Housing Scorecard report, released in early December, found Western Australia remained the strongest residential building market in the country, despite a slowdown in the state’s property market.

Cedar Woods has housing estate developments in Perth, Melbourne and Brisbane.

Sadleir said the housing market was tipped to grow strongly in Queensland, to moderate in Victoria and to ease in Western Australia.

Despite expectations of weakening conditions in two of the states in which the company operates, Sadleir said the listed company anticipates it will deliver a net profit in the 2015 financial year at least in line with its record profit in 2014.

“Expectations switched from interest rate rises to rate cuts the underlying conditions for the sector will be quite positive for the next year. We still have reasonable population growth and interest rates are a key thing that buyers are always looking at,” Sadleir said.

He said buyers had become more discerning and wanted high quality housing and amenities, and developers had to ensure they met the standards.

“Most of our projects are multi-year and if we deliver quality stage one and two, people have the confidence to buy into the area,” he said.

Demand is increasing for smaller, low maintenance lots.

“People are time poor and we try with the large estates to make sure we have got a good network of parks running through … For many people, the backyard is a patio to sit on and when they need more space it’s the park we provide,” Sadleir said.

One example is Carine Rise, a 7.93 hectare former TAFE site about 15 kilometres north of Perth CBD, which is being redeveloped by Cedar Woods Properties with LandCorp and the St Ives Group. The site is considered an infill development as it is surrounded by established suburbs rather than being on the outer fringes of the city.

The development will incorporate a range of housing, retirement living and commercial developments. Almost a hectare of the estate will be dedicated to public open spaces.

Most of the buyers for the medium density development come from within a radius of about five kilometres from the site. Many of the buyers in those types of developments are retirees looking to downsize their family homes while remaining in the neighbourhood, Sadleir said.

“Infill opportunities are few and far between so when they do come along people are interested in that housing choice in their locality,” Sadleir said. “I think we will see more of that and the buyers for that will be people from within those catchments.”

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.
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