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Key points:
Stronger margins despite lower revenue, supported by stabilising construction conditions$1.8 billion, five‑year Perth pipeline with substantial pre‑sales and tight rental vacancyNew Perth site acquisition near Bel Air Apartments aimed at quick project turnaround
Ronald Chan, CEO of Finbar (ASX:FRI), sets out an upbeat outlook for Perth’s apartment market, highlighting the company’s strongest profit result since FY15, despite only one project completing in the year. Chan states that while revenue is lower, margins are significantly higher, supported by stabilising construction conditions and a deliberate focus on mid-tier, more affordable product aimed at the broader owner-occupier market.
Chan points to Finbar’s $1.8 billion five‑year development pipeline, with around $560 million in pre-sales already locked in, which he views as providing strong earnings visibility. He emphasises tight rental vacancy of about 1.2%, robust rental yields and limited competing supply in Perth as key demand drivers. A newly acquired Perth site, located near the successful Bel Air Apartments project, is seen as offering a relatively quick two-and-a-half to three-year turnaround due to pro‑development local council settings.
On policy, Chan regards proposed federal changes to negative gearing and capital gains tax that favour new builds as supportive for apartment demand, expecting investor participation to lift from the current 30–40% back towards 50%. He also cites Western Australia’s $4.5 billion housing and infrastructure commitment and Finbar’s dedicated builder-architect model as important for delivery efficiency.
