Perth developer Atrio Property Group has begun building 37 apartments in the affluent western suburb of Nedlands, three-and-a-half years after the five-storey development was approved.
The developer blamed the pandemic and sky-rocketing construction costs in the West Australian capital for the delays to the build start.
Hillam Architects business development manager Narelle Helean told The Urban Developer the rise in Perth building costs over the past two years had “been a nightmare.”
“Construction costs have impacted the feasibility to the point that there have been lot of projects in Perth that have come out with approvals, but development is not proceeding,” Helean said.
“I am speaking from an architecture firm where we have multiple projects on hold,” she said. “The developers are sitting back on the sidelines and waiting.”
Herlean said Atrio Property now believes, given the housing shortage and an increase in sales prices, they will push ahead with construction.
Atrio appointed long-time West Australia residential and commercial builder Thomas Building to undertake the work in December last year. Construction on the 2028-square-metre site at 17-19 Louise Street began earlier this month.
Helean said eight of the 37 apartments were under contract, several from three years ago when the project was first mooted. Some buyers had pulled out because of the construction delays, and other contracts had been re-negotiated to better reflect current market conditions.
She said that in the past three years Perth prices had gone from under $10,000 a square metre to between $13,000 and $16,000 a square metre.
“Anything that is selling in Perth for less than $13,000 a square meter at the moment just doesn't stack up,” she said.
Perth property prices have seen a surge in the past 12 months.
Domain’s House Price Report for the 2023 third quarter showed Perth housing prices are at an all-time high.
Domain’s chief of research and economics, Dr Nicola Powell, said that while the results for the September quarter confirmed all Australian capital cities were in recovery or at a price peak, Adelaide, Perth and Sydney recorded the highest house gains.
Atrio first lodged plans with the Nedlands City Council in 2019. Approval for the $17.7 million building came in July of 2020.
Plans call for three one-bedroom apartments, two of 11 bedrooms and 23 of three bedrooms. Four of those will be penthouses.
Rooftop amenity will include a pool, dining and lounge areas and a barbecue area. There will be a gymnasium, 596sq m of landscaped space and parking for about 90 vehicles.
The developers acquired the two adjoining lots midway through 2019, paying $5.5 million for both.
“We have identified a significant demand in Nedlands and its surrounds for high-quality apartment products with luxury amenity in place, allowing residents to transition seamlessly within their local community,” Atrio’s managing director Ian Phipps said in announcing a start to construction.