South West WA

The Smartline Report – November Edition

The month in review: South West WA

By Herron Todd White
November 2016

While the South West population has continued to grow throughout 2016 we have seen a general weakening in the residential market in most localities. As housing has become more affordable we have seen a shift in purchasing trends from small residential allotments of 200 to 400 square metres,to larger residential allotments. Mum-and-dad purchasers have turned their focus to properties with larger backyards for the kids and the dog as these products have now become more affordable.

Mum-and-dad investors are also jumping into lower risk small scale developments. Some are developing now and others holding on to these types of properties for future development. This is seen as a way of setting themselves up or a nest egg for the future. The most common small scale development occurring in the South West is in the inner established areas where large residential lots are being subdivided into two or three residential strata developments comprising townhouse or villa style construction. This is being seen in such suburbs as South Bunbury, East Bunbury, Carey Park and Busselton.

With the market weakening, this type of development is becoming less viable with tighter profit margins, leaving many investors deciding to purchase and hold on to these properties for development down the track. Mum-and-dad purchasers are in less need of a fast turnaround time on development and are often in a position to hold on to such properties if the development is not viable now.

For mum-and-dad purchasers who want country living, there is some evidence of rural residential properties which are improved with small and old houses or liveable sheds. The intention is to then develop the property with a second larger dwelling. Most purchasers of this type of property are choosing to live in the existing dwelling for a couple of years until the owners have enough savings to build the dream home. However this is more often than not a situation where cost does not equal value and the properties are over capitalised. In most situations this type of development still goes ahead as owners are driven by the want for the so called dream home. This is resulting in rural residential properties with two dwellings on one title and in some instances owners are able to subdivide and sell off the original dwelling.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2016. Australian Credit Licence Number 385325

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.