WA’s R-Code changes increase opportunities for investors
August 13th, 2013 • No comments
Western Australia’s residential design codes, or ‘R-Codes’, determine the density of housing by stating the minimum and average sizes of lots in an area.
On August 2nd, the changes to the R-Codes came into affect. Many of them are good news for investors and developers as they will increase the development potential of certain residential lots and properties, providing an opportunity to increase asset returns.
Being aware of the R-Codes can mean a difference of hundreds of thousands to your portfolio’s capital growth and cash flow.
Investors should take the changes into consideration and assess the potential value-add of the new R-Codes to their next or existing properties.
Among the changes of most significance to investors are:
Changes to R20 (i.e. 20 dwellings per hectare): the average size of a dwelling in an area coded as R20 has been reduced from 500sqm to 450sqm. So where previously you could only build one house on a 900sqm lot, for example, you can now build two. This will greatly enhance the money-making potential of many sites and enable sub division without the need for planning permission. This translates to more assets, a quicker build and the ability to bring your product to market sooner.
Furthermore, a minimum site area of 350sqm is now permissible under the R20 code, increasing sub division flexibility.
R25 and R30: While the average sizes for lots under these codes remain unchanged, the minimum site areas have been reduced to 300sqm under R25 and 260sqm under R30, again increasing sub division flexibility and facilitating more rapid development.
Planning approval for a single dwelling is now only required for lots smaller than 260sqm (reduced from 350sqm) also helping to fast track development.
R60: the average size for lots coded R60 has also been reduced from 180sqm to 150sqm
The R-Codes also now make provision for R80 dwellings with an average site area of 120sqm and minimum of 100sqm.
Granny flats: The change immediately beneficial for investors, as it presents the greatest opportunity for increasing cash flow quickly, is the change to the ‘granny flat’ code.
From August 2nd, granny flats will not have to be rented to a family member of the main household. This means that any investors (or owner occupiers) with a property of more than 450sqm can build a granny flat onsite and rent it out to anyone. The allowed floor space has also been increased from 60sqm to 70sqm. It provides an instant opportunity to enhance the value of an existing asset and increase yield.
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