A New Year - A New Landscape

A shift towards smaller lots are evident in all final subdivision approval lots in greater Perth, lots under 320m/2 have increased by 15.3% since 2006/2007 and represent 27.1% of the market.  Approximately 45% of lots for 2012-2103 are in the 320 – 499 m/2 range. Only 16.6% of lots measure in between 500-599 m/2, a decline of 10.9% from 27.5%, which use to be commonly referred to as the average sized lot in 2006/7.

The recent changes to the R Codes indicate how the minimum and average lot sizes have changed lowering the minimum lot size for development. The R20 code changed from 440m/2 to 350m/2 with an average lot size requirement of 450m/2 as appose to 500m/2.

The most significant R code change must notably be the introduction of the new R80 with a minimum lot size of 100m/2 and an average lot size of a mere 120m/2!

Here are just some more popular R codes changes:

R30 Minimum 260m/2 Average 300m/2

R40 Minimum 180m/2 Average 220m/2

R60 Minimum 120m/2 Average 150m/2

For more details on the R Code Changes feel free to contact us.

Looking into the future it’s not just the lot sizes that are shrinking; mortgage rates have been and have remained at an all time low, improving affordability despite rising property prices. Unlike lot sizes that are tipped to continue to trend down, interest rates and stock levels could be rising towards the middle of next year and out towards 2014-2015. The jump in headline inflation in the September quarter was a bit faster than the local debt market had been expecting, but underlying measures are still in the lower half of RBA’s 2-3% medium-term target. The RBA will be keeping a close eye on the movements of the Australian dollar in the new year.

With the right planning, perhaps aspirational plans to upgrade could be well outlived in 2014. As of August WA Upgrader Housing finance commitments were up 14.3% year on year. We expect astute sellers may cautiously take advantage of the current demand on prices with listings moving in a narrow band and a general softening in the rental market becoming a catalyst for a changing market towards the latter part of the year.

The key indicators for investors remain strong, with increased development activity, rising record population growth, encouraged first home buyer activity and Perth dwelling construction to seven year highs. The modern landscape for property is changing with more of a focus on energy efficient building designs, communication networks, close to employment opportunities, regional and local transport, community wellbeing, and access to jobs, services and learning. Distinctive designs, with vibrant and flexible well designed streetscapes and outstanding public places are taking precedent in premium land development communities.

Three bedrooms homes accounted for nearly 45% of the Perth market for houses and multi residential sales with just over 40% of the proportion of sales having been for four bedroom homes and 35% multi residential, according to REIWA’s Sept quarter data.  An emerging trend is a shift to units with dwelling commencements having increased by some 76% across the Perth Metropolitan region in 2012-13.

The September quarter market data indicated early improvement in demand for the $700-800,000 price ranges which has in recent weeks become more evident. Wanneroo South and North West submarkets showed increased activity with the North West having the largest share of the outer markets with an estimated 20% of Perth’s house sales for 2012-2013.

The City of Wanneroo is forecast to grow by about 9000 people per annum to 2021.

Current data from the Real Estate Institute of Western Australia show that sales turnover lifted during both October and November pushing Perth’s median house price to a new record. 
The data show sales had returned to normal levels and indicate that for the three months to November Perth’s median house price climbed to around $530,000 - $535,000, up from the previous peak of $525,000 on the June quarter.

The quarterly median for the three months to November was up by almost 4% and due mainly to the composition of sales during this period after strong first home buyer activity pulled the median house price down to $510,000 in the September quarter. 


The data also show that in some of the coastal sub regions, such as parts of Wanneroo, Joondalup and in Rockingham there was a weakening in sales activity that had emerged through the month of November. 
While this retraction in sales is only modest at around 2 to 3% on the previous month, a drop in listings also in these areas, which suggests that the fall in sales activity has nothing to do with oversupply, accompanies it. 


Listings have remained stable for the last few weeks with a slight drop in dwellings.

The median rent in the metropolitan area has dropped by just over 2% over the last three months to $460 across the board. This now breaks down to typical rents for houses coming in at around $470 per week and for units and apartments at around $450 per week.

Current REIWA data show Rental listings may have reached their peak this week with a drop of 1% after a solid growth of 19% over the last two months.

With a new landscape, 2014 could prove to be a significant year.

On behalf of the team at DQ, I would like to thank all our past and future clients for recommending us and supporting us and would like to wish you and your families peace hope and joy this Christmas celebrating the New Year!