Perth “has all the market fundamentals” for strong apartment living demand, including build-to-rent homes, according to Charter Keck Cramer’s latest State of the Market report.
The report found the Western Australian capital led the nation in the rise of new apartment commencements and completions across the second half of 2024.
A supply gap of apartments and build-to-rent homes, however, has been forecast for Perth over the next three years.
Charter Keck Cramer’s report said Perth’s emerging build-to-rent market was set to enjoy strong demand, fuelled by its fly-in, fly-out workforce.
“Given the transient nature of the Perth workforce, demand for BTR is anticipated to remain,” the report said.
“This asset class is considered very attractive in this type of market.
“Perth has all the market fundamentals for BTS and BTR apartment living.
“As the city grows towards a population of 3 million, there will be a critical mass of residents and demand to support larger and additional apartment projects in highly sought-after locations.”
WA’s labour and material supply shortage does pose a challenge to the built-to-rent and apartment build-to-sell markets in Perth, according to the report.
“Perth has a small builder market with both labour and materials in short supply and expensive,” it said.
“There is a lack of industry capacity and capability to deliver the quantum and quality of apartments required by underlying demand.”
Property Council WA Executive Director Nicola Brischetto said while build-to-rent was a relatively new home type in Perth, it will play a strong role in the market.
“Build-to-rent and apartment homes will play an incredibly important role in Perth’s housing supply mix,” Ms Brischetto said.
“As more of these homes are completed across Perth and demonstrate the high level of amenity and connectivity they can offer local communities, Western Australians’ sentiment will shift more in favour of residential infill.
“Like all asset types in WA at the moment, high construction costs are the biggest barriers to development currently.
“Thankfully, the State Government has recognised this and has committed to nation-leading incentives for developers to kick-start project construction.”