Zoning legislation is but one of the many factors that affect the real estate market. The extent of land required for property construction determines the income-generating opportunities as far as property development is concerned. Such is the case in Perth, where zoning changes introduced in 2010 spurred an increase in residential properties and profits for both developers and investors.
Here is a look at some of the impacts of zoning changes and reasons Perth’s residents should pay more attention to them:
More Properties for Investment
The minimum required area for some residential properties decreased under Perth’s zoning changes. Developers would only need 900 square metres to build a two-lot subdivision and 350 square metre for a subdivided lot.
The lesser the space requirement, the more room for building duplex designs, apartments and other residential properties. In fact, the zoning changes made it easy for developers to get approval to build more apartments for investment. For instance, an 800sq m duplex block may contain around seven to eight apartments.
More Returns for Investment Property
The zoning changes introduced other sources of income in the form of granny flats. Homeowners can now build granny flats or secondary suites in their properties, regardless if they’re for family members or not. This means more income for those who plan to lease their extra space.
With more properties to sell or lease, there’ll be more potential returns for property developers and investors. Some real estate experts note that real estate development’s returns range from 15-20% for retaining and subdividing land to 35-45% for a small group of apartments.
In addition, there will be higher profits for developers and investors due to the rising prices. Some experts note that the prices of some properties went as high as $450,000 in 2012 and $700,000 in the current market.
Perth’s example tells the impact of zoning changes matter in real estate development. It can help determine whether you can set up additional property in your area or not. That’s why it’s important to pay attention to such matters when you’re planning to invest in property in Perth.