Owners of properties between 900sqm and 1000sqm have 12 months to gain approval to subdivide their lot before new residential design guidelines, developed by the Western Australian Planning Commission, come into effect on April 30, 2009.

Buyers purchasing a block that is being sold on its R20 subdivision potential should also be aware of the change. Most properties affected by the R20 duplex zoning are within about 10km radius of the city in suburbs such as Karrinyup, Bedford, Doubleview, Bayswater, Maylands, Victoria Park and South Perth. R20 zoning allowed blocks of between 900sqm and 1000sqm to be subdivided but the new guidelines made the minimum requirement 1000sqm.

The guidelines for R20 zoning were changed in 2002, however, the WAPC allowed an extended transition period which is due to expire in April next year.

Real Estate Institute of WA president Rob Druitt said it was imperative owners and potential property buyers of these sized lots were aware of the change.

"It is confusing with Network City, which is supposed to be promoting sensible urban infill, to take away this concession of R20 because it affects areas where predominantly people want to stay in the area but don't want to downsize to an apartment," he said.

"And 450sqm is ideal to put a single-storey, three or four-bed house with a low-maintenance garden that maintains the character of the suburb."

According to director of pfr.com.au Kendall Ranieri, owners could lose as much as $100,000 on properties in some areas due to change in zoning.

"It's pretty important, because it reduces your property value pretty substantially," he said.

"Not everyone wants to subdivide but everyone should at least be aware that these changes are going to take place. These property owners may have paid a premium price for these blocks in recent years with a long-term view to subdivide them and make substantial profits.

"Following the April 2009 deadline, it is likely that these blocks will fall in value if the owner does not take advantage of their subdivision potential during the coming year.

"In addition, property investors who are buying blocks advertised for subdivision potential should ensure that these blocks comply with the new guidelines that are effective from April 2009."

Mr Ranieri advises property owners who are thinking of selling or would like the option, to apply for subdivisional approval - at a cost of about $3000 to $5000 - which is valid for three years.

On average it should take about three to six months to gain approval.

Mr Druitt advised property owners interested in subdividing their lot to get in early to beat the rush.

"There is a time limit on these applications so if people are wanting to develop or are looking at selling their property as a development block in the short term they should put their application in as soon as possible because these will put further strain on an already strained planning system," he said.

For information on whether the zoning applies to your property contact your local council.

He said ABS figures for 2006 showed that 22.9 per cent of West Australians lived alone.

The Census also revealed that only 8.1 per cent of housing stocks were apartments or units.

"There will be a strong underlying demand for apartment living in WA over the coming years because this type of accommodation will be relatively more affordable than buying a large family house and will be more suited to smaller family households," Mr Wood said.

A recent ABS survey found that while Australian households were becoming smaller on average, dwelling sizes (as indicated by the number of bedrooms) was increasing.

The average number of people in each household had declined from 3.1 in 1976 to 2.5 in 2003-04. In the same period, the percentage of houses with four or more bedrooms had risen from 17 per cent, to 27 per cent. The average number of bedrooms per house increased from 2.8 to 3.

"With the median price of a standard Perth house approaching $500,000 in many suburbs, more home buyers who are living alone will opt to live in units," Mr Wood said.

More Western Australians are deciding to use the rising equity in their home to renovate rather than pay the change over costs associated with buying a new home such as stamp duty.

Jay Wood, Director of pfr.com.au believes that home owners should carefully consider the long term financial benefits of a home renovation.

“Home renovations make financial sense if you employ the correct building contractors, stay within your financial budget and spend your money in the correct places in the home.

“Very often, home owners make emotional decisions when undertaking a home renovation and at the end of the day they would have been better upgrading to a new property,” he said.

Based on the sale price of many renovated homes organized through pfr.com.au, home renovators can expect to achieve the following financial returns when renovation the following parts of a home:

* New room i.e. home office/home theatre (70% - 95% return) * Bathroom renovation (65% - 90% return) * Kitchen renovation (65% - 90% return) * Master bedroom en-suite (60% - 80% return) * Patio (65% - 80% return) * Landscaping (80% - 100% return) * Security (75% to 100% return) * Swimming Pool (50% return)

The returns that a home renovator can achieve on a renovation, however, do vary from location to location depending on the capital values of the properties and the type of homes in most demand in the area. However, the above guide does indicate that not all home renovations deliver high financial returns to the homeowner and they should undertake careful research before undertaking a major home renovation.

Home renovators should also visit the Archicentre website (The Royal Australian Institute of Architects). This website provides a useful cost guide for home renovations at http://www.archicentre.com.au/2008JAN_Fullcostguide.pdf

Real estate agency pfr.com.au has a fundraising project to help raise $50,000 for the Robert Wiley Junior Football Development Foundation at Perth Football Club.

The foundation was established to develop junior footballers in the Perth district.

Named after the WA Football Commission's high performance coach, Robert Wiley, it concentrates on providing intensive and comprehensive life skills to give talented footballers the preparation neccessary to ready them for their football career.

According to pfr.com.au's director Jay Wood, anyone who wants to raise funds for the foundation can list their property with pfr.com.au and they will not be charged a sellers fee by the company.

"All we ask is that the seller donates $5,000 to the Robert Wiley Junior Development Foundation and pay for advertising costs related to selling the property," he said.

"It is an easy way for home owners to raise significant funds for junior football."

“Rising impost costs for development as a result of local and state government charges are now at the highest level in more than a generation.

MEDIAN PRICE OF A BLOCK OF LAND IN PERTH

$65,000

$86,000

$135,000

$265,000

* Source REIWA

“Land development is now an easy cash cow for all levels of government because these charges are effectively hidden from the consumer. The reality is that consumers pay for these charges because they are passed onto the property buyer in the selling price of the land.

“In the City of Wanneroo for example has an Infrastructure cost of $29,000.00 /lot. Consumers are generally not aware that developers have to pay this cost on top of all the construction costs.

“Development costs within the City of Wanneroo Eastern Cell area is $75,000 plus per lot. In some of the near city areas of Perth, local governments are now charging ‘open space’ fees which can add more than $80,000 to the cost of a strata unit lot.

“These are major imposts when you consider that the median price of a block of land in Perth was just $86,000 back in 2000. Over the past seven years the median price of a block of land in Perth has soared by $179,000 or more than 200%.During the ten years from 1990 to 2000, the median price of a block of land in Perth rose by only $21,000 or 24%.

“There urgently needs to be a uniform approach to development costs imposed by State and Local Governments in Western Australia. Western Australia is currently the only State in Australia without a uniform “Development Contributions” policy.

“In the interim, the State Government could follow the approach of the New South Wales Government which recently announced plans to reduce infrastructure costs by $25,000 per lot in Western Sydney,” he said.

According to Mr Wood, December is traditionally the lowest selling month for properties in the Perth metropolitan area.

“Historically there are nearly 15% fewer homes sold on average during December compared to the best month which is March.

“The reason why there are so few property sales during December is because there is a reduction in the number of potential home buyers.

“Many potential buyers leave the real estate market during December because of issues such as holidays and Christmas.

“There are now on average more than 12,000 homes advertised for sale each week in Perth, so it is important to remember that seasonal issues such as holidays can affect how many buyers are in the market and therefore the selling price of a property.

“Timing is everything in the real estate market and December is an excellent time to consider buying a property.

“For first time buyers, it makes financial sense to look for an investment opportunity when there are fewer buyers in the housing market.

“The housing market has been very soft in recent months and with even fewer buyers in the market during December, there is an opportunity to achieve a significant discount from vendors who are keen to sell.

“In particular, first home buyers should be targeting older style properties in near city areas because these properties can be now purchase for near land value. Because of their proximity to the city centre, these properties has historically achieved high levels of capital growth which will give first home buyers an important first step on the property ladder,” he said.

Mr Wood said there were now a number of older properties which could be purchased for near land values in near city areas such as East Victoria Park, Kewdale, Belmont,Cloverdale, Osborne Park, Balga and Girrawheen.

According to property advisor, Michael Ruzzi of pfr.com.au, the real estate industry is entering a new era where online services are empowering home sellers and challenging real estate agents to become more flexible in their service offerings and fees. He said pfr.com.au was leading the field in utilising new technology to tailor to individual seller requirements and win new business

“In some cases it is now possible to cut agents selling fees by over 60% without skipping a beat in quality of service and final sale price,” Mr Ruzzi said. ‘The internet, virtual tours, mobile phones and email all save real estate agents’ time and money – why not pass these savings on to the customer?”

In one recent case, young couple Michael and Lisa McClue were looking to upgrade their home through the sale of an investment apartment on Adelaide Tce, Perth. They listed their property on SellMyCastle, the free online meeting place for residential sellers and agents.

Local agents registered on the site were alerted to make an offer for the sale, allowing Michael and Lisa to freely compare information – including commission rates, terms and conditions, local knowledge, experience and consumer ratings and comments – in a pressure-free environment.

After receiving ten bids in only a few days, saving hours of running around, Michael and Lisa chose Michael Ruzzi of pfr.com.au, as he offered a low fee on conditions tailored to their needs. The apartment was sold in just over one week, at a record price within the complex of $229,000 – $15,000 higher than the previous record set a few months earlier – and a saving of more than $4,000 on agent selling fees.

SellMyCastle CEO Dan Winblad said technology was enabling sellers to take charge to ensure the best agent to represent their interests. He said the SellMyCastle model had proven successful in Europe, and would change the way Australian home-owners sought a real estate agent.Mr Winblad said, with 1,500 agents registered, almost all of Australia’s largest and most well-known franchised agencies had representation.

“The positive feedback we are hearing is the same time and time again – people have simply never seen anything like this before in Australia – and they like it,” he said.

Michael Ruzzi has just listed a similar studio apartment in the complex. For a viewing or to find out how technology can save you money when selling you’re home call 0419 967 269.

Mr Mucci said generational suburbs are areas where all generations of the family can live close together.

“My own family is a good example of a family that lives together in a generational suburb of Lathlain. My grandmother Anna have lived in the suburb for the past 40 years and my parents moved back into the suburb nearly 20 years ago to be close to her. In addition, my mother’s brother also lives in the Lathlain and I live nearby in the suburb of Victoria Park.

“Advances in medical care have meant that people are now living much longer and have more active lives later in life. Rather than moving to a retirement village, older people want to live in their family home with their relatives nearby.

“Recent ABS research figures show that the life expectancy in Australia was now 76.2 years for male and 81.8 years for females.

“These figures show that male life expectancy was highest in the ACT (77.9 years) and female life expectancy is highest in Western Australia (82.1 years)

“Looking back over the last century, we can appreciate how rapidly our population is ‘greying’. In 1901, around 4% of our entire population were aged over 65 years. By 1998 around 12% of our population were aged over 65 years. More significantly, it is projected by the ABS that by 2051, some 24% -26% of our population in Australia will be over 65 years of age!

“The geographic growth of the Perth metropolitan area combined with concerns over social issues such as crime would encourage more people to choose to live in suburbs where entire families could live together.

“Over the past year, I have found a growing trend amongst younger property buyers to purchase homes near their ageing parents.

“Historically, families have wanted to live close to each other and the urban sprawl over the last 30 years has been resulted in a separation of many families.

“For example, because of the growth of the Perth metropolitan area over the past three decades, you could have the grandparents living in Victoria Park, parents living in Kingsley and the grandchildren living in Rockingham.

“This division of families has been further compounded by the fact that many suburbs in Perth do not offer higher density properties where older people can purchase. As a result, they have to move out of the suburb where the family home is located and move to another area.

“The long distances that Perth families now have to travel to meet each other are now giving a premium value to suburbs which can accommodate a broad spectrum of family’s members.

“Already, new estate developers are trying to capitalise on this new social trend with estates such as Ellenbrook providing a range of housing choices for families from retiree villages to areas for first home buyers all within the same estate.

“As a result, land sales in Ellenbrook have been consistently high because it is proving a popular location for families who want to remain within the same geographic area.

“The emergence of generational suburbs is further underlined by the growing popularity of Burswood.

“As a result of the new developments in the area, the suburb of Burswood is now effectively a generational suburb because it now offers a broad choice of homes for families from traditional family homes, through to higher density properties elderly people and first home buyers.

“The popularity of homes in Burswood is highlighted by the latest REWIA figures which show that over the past five years the annual price growth of homes in this suburb has been nearly 30%,” he said.

John joins his son Kendall Ranieri who is one of the founding directors of the pfr.com.au. Kendall said he was delighted his father had decided to join the company after life time career as a licensed surveyor.

John has worked for more than 30 years as a licensed surveyor. He owned his own surveying business for 20 years and having sold his practice to Fugro Spatial Solutions Pty Ltd, Australia's largest surveying and mapping company. John was retained as a senior manager for the following 11 years and his role as manager of the Property Services Department brought John into contact with many major Perth land developers in projects throughout the metropolitan and South West region of WA.

In recent years John has been involved as a project manager in urban land subdivisions and strata title developments. These projects have ranged from small units development to land sub divisions such as the Marri Fields Estate in Byford and 40 – 50 lot subdivisions in Canning Vale.

John Ranieri can be contacted on 0438 996 848

Rising interest rates will make properties even less affordable for first home buyers and mean that they will have to stay longer in rented accommodation.

The rental vacancy rate in Perth is now the lowest in Australia because more people are choosing to rent because they cannot find a home to purchase.

Figures produced by the Real Estate Institute of Australia (REIA) show that the rental vacancy rate in Perth during the December 2005 quarter was 1.6% which compared to Adelaide (1.7%), Melbourne (2.1%), Brisbane (2.1%), Hobart (2.2%), Sydney (2.6%), Canberra (2.8%) and Darwin (4.4%).

These very low vacancy rates are putting an upward pressure on rents with REIA figures, for example, showing that the weekly rent for a three bedroom home in Perth surged by 21.0% during the December 2005 quarter to $230.00.

pfr.com.au has found that over the last six months there is a large group of potential first home buyers who have renewed their rental leases because they cannot afford to purchase a home.

This means that there have been fewer properties available for lease at a time when demand for rental properties is increasing because of the growing number of people moving to Western Australia from overseas.

During 2006 it is projected that the net migration to Western Australia is expected to rise to 17,400 persons and increase to 18,900 persons during 2007.

Currently around 20% or one in five rental applications received by pfr.com.au are from people who previously resided outside Western Australia which compared to around 10% one year ago.

In the current tight rental market, there is every indication that landlords will offset the higher costs of rising interest rates by increasing rents.

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