Brisbane City Council Moves the Goal Posts regarding Small Lot Subdivision

Recently a little known but significant change has been made to Brisbane's small lot development regulations. These changes relate to the minimum size of small lots and (it would seem to many) have been introduced by stealth. These changes hold the potential for some to make a lot of money and others to lose equity - particularly if they are unaware of the impact of the changes.

So what are the changes?

Up until recently, the minimum size for a small lot in Brisbane was 400m2.  It’s been that way for a long time – in fact most of Brisbane’s older suburbs hold a myriad of these “16 perch” blocks.  Generally, they are 10m wide and 40m deep, though there are also square blocks measuring 20m by 20m.  Many house sites comprise two such lots to make up a “32 perch” allotment (809m2). 

Effective from 1st January, 2007 – the minimum “low density residential” lot size was increased by Brisbane City Council to 450m2 within the Demolition Control Precinct.

How will it affect land owners?

The impact could be quite substantial.  Many people living and buying in Brisbane’s “old and inner ring” suburbs are very aware of the development potential of these “32 perch” blocks.  These sites carry a price premium because of the potential for the site to be developed into two “16 perch” lots (and for two houses to be constructed on the site).  But for many such owners, that is all about to change.  Many sites that could be developed under the old regulations will not any longer be able to be developed under the new rules.

The looming tragedy is most people don’t know about the changes.  And it could very likely cost them a lot of money.

Yet it doesn’t apply to everyone.  In cases where a house is sitting on two existing 400m2 lots and the house was built post war (and can therefore be demolished), the development potential for the site remains intact.  So the new rules will impact upon single lot sites which are larger than 800m2 but less than 900m2 within a Demolition Control Precinct.  Plus sites offering subdivision potential where the existing house does not need to be moved (such as corner “cut-off” sites).

The Investment House Research Team undertook a preliminary assessment in the suburb of Camp Hill.  They found approximately 33 home owners would be likely to be caught by the changed rules.  This could well be reflected across more suburbs.

So what can owners do about it?

The best way for owners of such lots to protect their interests is to apply for a development approval.  That way they protect the future potential to develop the site. There is a provision within the Integrated Planning Act for existing landowners to be assessed under the superseded regulations for a period of two years.  So owners have about 18 months left before this window closes.

Our Research Team are able to provide further details on these changes and will be happy to explain how owners can protect their interest.  If you feel you may be one of those owners who will be affected by the new regulation please email marco@investmenthouse.com.au to discuss the matter further. If you know anyone else who may be in this situation, feel free to pass this information on.

What does it mean to Investment House clients?

Whilst it makes our job of finding prospective development sites even harder by exacerbating the already tight supply within inner ring suburbs, it will be good for our investors.  This further tightening of supply can only serve to magnify the already impressive capital growth potential within these suburbs.  It’s very good news for investors who already hold property within these inner ring suburbs.

“Wealthyfrog” – funny name, but a great idea.

Where can you find qualified and genuinely independent investment advice?  It’s a good question.  Nearly everybody providing investment advice has a vested interest in the advice they present.  There are almost always commissions and kick-backs that can potentially “skew” the advice. 

So where can you go? 

Now there is a company providing genuinely independent investment advice – they don’t receive any commissions or kick-backs.  The company is “Wealthyfrog” – it’s a funny name, but a great idea.

We felt more people should know this service is available, so we’ve asked them to provide an article by way of introduction.  Feel free to contact them directly to find out more about how they work – our feedback to date has been all positive!

If only I could travel back in time….

Knowing what you know now, if you could go back in time to 1997, what would you tell yourself?  What would you tell yourself about your finances?  Would you tell yourself to make a sacrifice on your personal spending so you can get into a property or set up a share portfolio?  Would you tell yourself to get into the property market before the 2000 property boom?  Would you tell yourself to get into the share market in 2003?  Where could you be now if you knew this information 10 years ago?  

Isn’t hindsight a beautiful thing?  But can we use these experiences to make more informed decisions now and in the future?  YES!  If you fast forward to 2017, what do you think the you of 2017 would tell you now in 2007?  What would you tell yourself to do?  Maybe you should listen… 

It can be hard to get the right advice on getting ahead financially. Financial planners have skills to invest your big super payout, accountants are great for doing your tax return. But how do you learn how to create wealth in the first place?

Wealthyfrog provides neutral expert coaching geared towards helping you achieve financial freedom for life.

Should you wish to speak with Wealthyfrog for a complimentary session to obtain an unbiased opinion of your financial situation, please visit our website on http://www.wealthyfrog.com.au or call us on (07) 3514 7000.

Let us know you heard about us through Investment House

End of Financial Year – To Do List

Have you lodged your Tax Variation (PAYG Withholding Variation) for the new financial year? 

If you’re like many of us, the end of financial year has caught you a little off guard and there are still some chores that haven’t been done.  If you haven’t lodged your application for next year’s tax variation, you’d best get it done smartly.

The variation you have in place now will expire at the end of this financial year.  You need to lodge a new application with the ATO for each financial year.

Generally, it takes a week or so for the approval.  Unless you get the application in smartly, you may find your July salary payments have had the correct (unvaried) amount of tax deducted by your employer.  And if you have a loan repayment due at the end of July, you may find yourself having to stretch.

You can have your accountant prepare your application, or you can do it yourself on-line.  Follow this link to do it yourself:

http://www.ato.gov.au/taxprofessionals/content.asp?doc=/Content/00096490.htm
(Note: We have noticed that the ATO website is having problems displaying some pages. If this link does not open properly for you, try pressing "Ctrl + F5" to refresh the page until it does).

Brisbane Rents Continue to Climb

Brisbane’s rental market remains extremely buoyant with residential rents increasing in the order of 14.3% for the 12 months to March (according to recent research by Australian Property Monitors).  They reported that Brisbane’s median rent for houses is now $320pw.

From our own experience, there continues to be a high level of demand for our executive level housing which is currently commanding rents in the order of $650pw.

The research showed increases in rents over the last year now represent a Gross Rental Yield of 4.81% (which is up from 4.52% in Mar 06).  This higher yield is likely to generate renewed interest from the investor market, particularly with the equities market showing some instability.

Whilst rental demand for detached housing remains very strong, the abundance of new units being completed in near city suburbs has fuelled a markedly more volatile rental environment.  South Brisbane in particular has seen a number of new developments being completed concurrently so there is some prospect of oversupply in the short term – landlords need to listen carefully to their property managers’ feedback and meet the market to secure a tenant if need be (but keep the lease period short so you can review the rental amount when the surplus is absorbed).

New Report spells out what every landlord should demand from Property Managers.

Are you getting what you’re paying for?  Even in the current market with vacancy at very low levels, there are many landlords who are not enjoying optimum rents from their investments.  This is because some Property Managers are not maximising potential rentals.

When vacancy is high, property managers are quick to suggest landlords adjust their expectations and meet the market to win tenants.  But now the tables have turned and it’s time for landlords to enjoy the better times.  However, many property managers are selling their landlords short.  They do this by only marginally increasing rents when demand for those same properties could be generate much higher rents.  In this way, property managers are costing landlords many hundreds if not thousands of dollars each year.

It’s important to maximise your rental income.  If your rents are not moving up in line with the overall market, then you may be missing out.  This is just one item highlighted in a new report developed by the Investment House Property Management Team to help landlords find and engage Proactive Property Managers. 

You can download the free report at… www.inhousepropertymanagement.com.au

And if you’re looking for Proactive Property Management in Brisbane – contact our team on (07) 3369 0111.