For the past decade, the Subiaco Pavilion Markets site has been idle - a glaring inner-city example of the indecision that has gripped local and state governments as to what the future Subiaco should look like.
Now without WA football's epicentre, Domain Stadium, Subiaco seems to be a suburb that has struggled to balance the demands of developers keen to cash in on its unrivalled location and an anti-development council backed by a loud vocal minority.
Though most agents in the area believe the market has well and truly seen the bottom, the local apartment market has been particularly hard hit. Many now sell for below replacement cost and other projects have stalled indefinitely.
Leading WA property analyst and commentator Gavin Hegney says though Subiaco has largely weathered the storm without a wholesale collapse, it suffered from an oversupply of apartment developments, and demand post-boom dropped off significantly.
The Pavilion Markets site, a 5000-plus square metre slice of prime real estate just four kilometres from the CBD was earmarked for a combined apartment, retail, commercial and entertainment precinct set over 16 storeys at its tallest point.
Its Melbourne-based owner, Andrew Abercrombie, purchased the site a decade ago and shut the once-thriving local markets. Since its value has plummeted as he fought a determinedly anti-development local council over height limits and rezoning issues.
The site was put up for sale in July last year with a reported asking price of $30 million but failed to sell and a proposed starting point has once again pushed out for a further two years, according to recent reports.
The failure to attract any real buyers, and the current owner's reluctance to take a punt on the local market's rebounding progress, reiterate the jitters that remain in Perth's once-booming apartment sector, Mr Hegney says.
"Demand has really dropped off in the apartment sector and vacancy levels remain high, so we are seeing developers increasingly put projects on hold until they can see a real improvement in conditions," he said.
While house prices have dropped from a median high of $1,275,000 in September 2010 at the height of the mining boom to $1.21 million in September, according to Domain Group data, unit prices have been harder hit; dropping from a median high of $650,000 to $525,000 in September this year, the lowest since September 2008.
Local agent Chris Tsokos, director of Tsokos Property, used an apartment he had listed as one indicator of how much the market had fallen. It sold a couple of years ago for $950,000, but it was now struggling to attract interest at $650,000.
"I think that with the footy stadium going to Burswood, it's really going to force the local council to work hard and make some concessions and drop some of the bureaucracy to entice people back into Subiaco," he said.
"However, there is a sense that they've left it all a bit too late.
"There are a few developments that are selling, however things have to be priced really realistically to move and owners and developers must recognise that they need to meet the market or things are just not going to sell."
Mr Hegney said that Subiaco's location would always underpin its value and position it at the upper end of the WA property market.
"From a map, Subiaco is fantastically located on the rail line between the city and the coast ... [It] is one of Perth's best located suburbs, however it is currently suffering from a bit of an identity crisis," Mr Hegney offered.
He said the uncertainty around the Pavilion markets site, and that which surrounded the proposed redevelopment of Subiaco Oval, had pervaded, and good leadership was needed to see the once-thriving suburb reinvent itself.
"The suburb now feels dislocated and poorly thought out and is struggling to regain its identity as a result," he said.
Mr Hegney said the failure of Subiaco to transform from an elegant, residentially dominated, largely middle-class suburb into a vibrant and diverse inner city hub, was largely a case of "planning asleep at the wheel".
He says the redevelopment of Subiaco Oval, following the construction of the soon-to-be complete Optus stadium in Burswood, was a positive sign for the potential diversification of the market.
"I think it is a real positive and will bring families and further investment and diversity into Subiaco," he said.
Real Estate Institute of WA president Hayden Groves said prices in Subiaco, like the majority of Perth, had been adversely affected by the resources downturn.
"Undoubtedly, the Subiaco apartment market had suffered in recent times because of restrictive planning policies, and you will find developers will always seek the path of least resistance in order to turn a profit," he said.
"It is definitely worth supporting well-considered development in suburbs like Subiaco, however bringing along the 'not in my backyard' community is often the major challenge. I don't believe that for Subiaco that it's insurmountable."
Mr Hegney said there was no reason why the best was not ahead for both commercial and residential markets.
"Subiaco needs to accept some changes are going to happen, however it's already an entertainment, dining and retail hub so it already ticks a lot of boxes in terms of what the market wants."
