Finbar to start $408m Perth project amid major sales surge

Western Australia’s biggest apartments developer says construction work is expected to start early next year on its $408 million Civic Heart development in South Perth, with sales surging among owner-occupiers and investors.

ASX-listed Finbar Group recently announced it had recorded its largest monthly sales volume since July 2017, the latest indication that the WA property market had solidly moved into an upwards trajectory.

Managing director Darren Pateman said the sales were particularly encouraging in the wake of the COVID-19 outbreak, which earlier this year had threatened to plunge WA markets into a 6th consecutive year of decline.

Mr Pateman said Perth’s tightening rental market, where vacancy levels are at their lowest point in three decades, was stoking buyer demand and had begun to pique the interest of investors.

“After a prolonged absence from the Perth market, we are currently seeing the return of investors as a result of the tight rental market and more buoyant conditions across the market in the wake of the pandemic,” Mr Pateman said.

“This rental market tightening coupled with record low interest rates is also encouraging tenants to enter the market as buyers which is helping with the sale of our entry level product.”

Those conditions have prompted Finbar to bring forward an early works program for Civic Heart, with the two-tower, 309-apartment project set to kick off in January.

Progress at Civic Heart has been a long saga for Finbar, with its initial proposal for the prime near-city site being shelved in 2017, after ongoing uncertainty over planning rules in South Perth spooked buyers.

Finbar’s second proposal for the flagship site, previously known as South Perth’s Civic Triangle, was initially knocked back by planning authorities, a decision that prompted WA Planning Minister Rita Saffioti to intervene and overturn the rejection.

Mr Pateman said Finbar had achieved 60 sales at Civic Heart, collectively worth $59 million.

“Despite the ongoing negative impact of the foreign buyers’ tax, we have seen a slight increase in foreign buyers across our portfolio, attracted to Western Australia because of its strong economic performance and its position as a safe place to live and invest,” Mr Pateman said.

“While we welcome the return of investors, it will likely not happen in significant numbers until the uncertainty of the government imposed rental moratorium comes to an end in March next year.

“The return of investors is also a key element in addressing the current rental shortage across Perth which is predicted to increase in 2021.”