For many families across Perth, and especially here in the hills and foothills, the rising cost of housing is becoming a very real concern. What once felt achievable for young Australians is now starting to feel increasingly out of reach, and I know many parents are quietly wondering whether the future may involve building granny flats or finding ways to keep multiple generations living together for longer than we ever imagined.
At the same time, we are starting to see a significant shift in the investment market.
With potential changes to capital gains tax and tenancy legislation being discussed, many investors are becoming nervous about what lies ahead. In our own business, we have already seen several investors opting to sell their rental properties, and from speaking with other agencies, this appears to be happening right across Perth.
What’s particularly interesting is what’s beginning to happen in the development market.
If you look online right now around the foothills of Kalamunda, there are development sites available that, over the last five years, would have been snapped up almost immediately. Many of these sites were previously purchased by interstate investors who simply held them for long-term capital growth and future subdivision potential. But now, with uncertainty surrounding future legislation and changing market conditions, some investors are deciding it may be time to exit the Perth market altogether.
And while that sounds concerning on the surface, I actually believe it may create an opportunity, particularly for local families thinking long term.
I think it is becoming fairly clear that parts of the Perth market are beginning to flatten, and over the next six to twelve months there may be a window where well-positioned development properties become more accessible again. For families who have been wondering how they can help their children eventually enter the market, this could present an interesting strategy.
Many people are already exploring the idea of purchasing development properties through their superannuation funds. While that usually means you cannot immediately develop the site, the long-term thinking is compelling. By the time retirement approaches, those same properties may be ready for subdivision or redevelopment, potentially aligning with the stage of life where children are looking to buy their first homes.
It may not have been the retirement plan many of us originally envisioned, But then again, neither was the idea of the kids staying at home forever.
The concept of purchasing an older-style home on a triplex or duplex site, holding it as an investment for the next decade or two, and eventually developing it into multiple dwellings is starting to make a lot of sense for many families. Even outside of superannuation, there is still strong appeal in being able to turn one property into multiple rental incomes or future homes for family members.
Of course, timing will be everything, both in terms of when you buy and when you eventually build, but from where I sit, it does feel like the opportunity to purchase and hold quality development property may be approaching again after several years of rapid growth and intense competition.
If this is something you’ve been thinking about yourself, or if you’re trying to work out how to help your children navigate the future property market, feel free to reach out. These are conversations I’m having regularly at the moment, and there may be more options available than you initially think.
Contact Glen Newland on 0433 657 895 to find out more.
