Mr Blackburne said while the general apartment market was flagging, low construction prices has meant they can build big higher-end apartments at lower costs to fill a gap that has been lingering for decades.
“There is an impression that the market is challenging at the moment and it is in the general market, however there is without a doubt a shortage of supply of larger higher-end apartments in prime spots in the western suburbs,” he said.
“In the boom there were a lot of smaller medium to low end apartments built and a real lack of supply of the larger higher-end stuff.
“Markets change, kids are leaving home, and the baby boomers realise they don’t necessarily need the garden, the spare bedrooms, the large house to clean or maintain, and the lack of security.
“Downsizing is probably the wrong word, ‘right-sizing’ is more appropriate.”
Mr Blackburne said attitudes were changing towards density in the western suburbs, demonstrated by his developments in Claremont and Swanbourne that were snapped up.
“There has been a lack of supply in the western suburbs because there was never any height in them so you couldn’t get apartments in the western suburbs because of the resistance from some of the local council,” he said.
“But what you’re finding now it is actually the locals that want them … at least 50 per cent of the buyers looking at Subiaco are people from the western suburbs looking to stay in the western suburbs.”
A further 20 per cent of interest was coming from investors who wanted to take advantage of the first ‘positively geared’ rentals in Perth in years.
“You can buy a one bedroom in here for $359,000 and it will rent for $400 a week,” he said.
“That means with low interest rates now it’s actually the first time I’ve seen positively geared apartments that I can remember.”
Urban Development Institute of Australia WA chief executive Tanya Steinbeck said the high-end market wasn’t just buzzing in the western suburbs, there was demand for high-end products right along the coast.
Hamish Hastie is WAtoday’s business reporter.