Rising Tide of Luxury Apartments Washes Over Perth’s Coastal Hotspots

Perth’s northwest is heating up. North of the Swan River, from Cottesloe to Scarborough to Sorrento and beyond, the WA capital's coastal suburbs are ripe for higher density, high-rise and high-end development. “We believe nothing beats the WA coastline and Perth beaches in terms of lifestyle,” Gary Dempsey, founder of Gary Dempsey Developments (GDD), says. But governments need to prioritise development in well-established communities with existing infrastructure, rather than allowing the unabated urban sprawl to continue unabated, he says. “The main challenges to that are ineffective and outdated planning schemes with overly stringent policies that are not aligned with current economic conditions or with the housing crisis.” GDD is working on the 12-storey, high-end Myka apartment tower for a Scarborough site. It was approved by the WA Development Assessment Panel (DAP) in March. ▲ Townhouses such as this Westbridge-developed Cottesloe project are the “missing middle” between low and high-rise development. Meanwhile, a seven-storey block of 83 apartments at Sorrento is on exhibition, as is a luxury Claremont apartment project. In October, plans were filed for a 15 and 17-storey Cottesloe project, while Edge Visionary Living late last year appointed Roberts Co to build its luxury Scarborough apartment block dubbed The Dunes. Clearly, development is continuing at pace, but there are issues holding it back, including a long-standing antipathy towards high-rise development in Perth’s suburbs. Hilliam Architects principal and co-owner of Edge Visionary Living David Hillam says it’s a relatively slow process of transition but “there’s no doubt” it is happening. “There is a growing acknowledgement that greater density is appropriate in these locations,” he says Density pressure grows Perth, unlike Melbourne, Brisbane and Sydney, has always had less in the way of medium and high-rise infill development and indeed typologies other than a detached home, but this appears to be changing. “There is a general acknowledgement that there is an undersupply of apartments compared to capital cities,” says Hillam. “While the percentage of people in apartments is still low in Perth, the extent of urban sprawl on infrastructure is making living further out less attractive, so there is definitely demand from downsizers and also young people who want to live where they know they’re going to get amenity in terms facilities and walkability.” Westbridge Funds Management chairman Damian Collins says that while there might not be a whole lot of development opportunities right now, “there is certainly a lot of pressure from the state government to increase densities”. “But by-and-large there has been community resistance to development, and especially multi-storey apartments, on the foreshore. ▲ Westbridge Funds Management chairman Damian Collins. “The community has been keen to not see it turn into a Gold Coast,” Collins says. Developers are hindered by a multitude of smaller councils across the region that lack a “joined up” approach, and finding a good site is also a challenge, Collins says, given the lack of high density zoning in the area and smaller lot sizes. “It’s certainly not an easy process and I think that is being reflected in the number of projects actually going ahead at the moment,” Dempsey says. “The main challenges are the ineffective and outdated planning schemes with overly stringent policies that are not aligned with current economic conditions or with the housing crisis.” ▲ GDD founder Gary Dempsey. Changes are afoot, however, and DAP reforms introduced in March created an “opt-in” pathway for any non-excluded development of more than $2 million in value, which means they can sidestep councils. As well, individual councils are seeing the need for change. Planning control of Scarborough’s urban renewal was handed back to the City of Stirling Council last year after being held by DevelopmentWA since 2014. “Following the normalisation of the Scarborough planning scheme back to the City of Stirling earlier this year, they have been more considered in their approach ... and have been supportive and amenable to well-considered and designed projects,” Dempsey says. Gold Coast of the West? Part of council reticence to support development, it has been suggested, is the influence of the NIMBY camp that claims locations such as Scarborough are being primed to become “Perth’s Gold Coast.” “That’s scaremongering and absolute nonsense,” Dempsey says. “This sort of comparison has been around for more than 10 years, and Scarborough certainly hasn’t turned into Surfers Paradise during this time, nor is it likely to any time soon.” There are some projects reaching greater heights, which is laying the foundations for higher density and greater building heights. “We obtained approval for probably the tallest building in Cottesloe, but it was still only at 12 levels so it’s a long way from the Gold Coast, but at Dunes we do have additional height at 18 levels, which is foreshadowing a potential uplift in that area,” Hillam says. ▲ A render of an 83-unit, seven-storey Hillam-designed Sorrento project by Locus Group that is currently on exhibition. What the coastal suburbs have on their side is price growth. In Cottesloe, median two-bedroom apartment prices sit at $1.17 million, according to RealEstate.com.au, while the median for a similar product for the Perth region is $540,000, with prices trending upwards. “It has to be one of the top three most expensive suburbs in Perth,” Collins says. “And that’s reflected in the developments we’re seeing there. We’re selling townhouses from $5.5 million upwards, and apartments on Marine Parade that have been developed range from $5 million to $15 million.” While beachfront homes will remain at a premium, the opportunities for development are further inland. “Within Cottesloe there are three train stations, so there is certainly expected to be a lot of development activity and rezoning around the station precincts,” Collins says. ▲ High-end apartment projects like GDD’s Myka are stacking up in Perth’s west. Westbridge’s Cottesloe Fund is developing luxury townhouses as a bridge between standard and high-rise development. “The townhouses have been well received, they’re more viable and they also sit in that missing middle,” Collins says. While planning frameworks are “well overdue” for updating, there is continued hope for the growth of apartment living in Perth. “Perth has some catching up to do, but the government is doing some great work in supporting the change in attitudes towards density and encouraging councils to work more quickly and reassess planning frameworks,” Hillam says. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

Rising Tide of Luxury Apartments Washes Over Perth’s Coastal Hotspots

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