What are the holding costs of an investment property?

When it comes to property investing, most of the focus is put on the cost to buy the asset. However, there are also ongoing expenses that investors need to be aware of.

If you can’t meet these ongoing costs, then you’ll likely be forced to sell the investment property and end up in a worse situation than when you started. Therefore, it’s essential to know that you can afford the associated holding costs.

But what are some of the typical holding costs of an investment property?

Property management fees. A good professional property management firm will proactively manage your portfolio and deal with any issues that may arise. The cost and level of service will differ between companies so it’s important to complete research and find a company that provides add-value recommendations and annual reviews to optimise your properties’ returns. While this is a holding cost, it’s important to note that property management fees are tax deductible.

Strata fees. Apartments, villas and townhouses will often require investors to pay strata fees, which are the responsibility of the landlord, not the tenant. These fees are used to maintain common areas of the property (i.e. lifts, gymnasiums or garden maintenance). The more additional features there are within a complex, the higher the strata fees will generally be.

Maintenance costs. It’s advised to set aside some buffer funds for annual maintenance jobs, particularly if your investment property is an older house, but could also be required for a villa or townhouse. The buffer funds can be used for any unexpected costs such as replacing rusting gutters, the lopping of overgrown trees or to lay new carpet or for a fresh coat of paint.

Mortgage repayments. Mortgage repayments are generally the biggest holding cost for an investor. However, it doesn’t have to be a drain on your hip pocket. For example, for investors on tighter budgets it would be better to target properties with higher rental yields to help cover more of the mortgage. On the other hand, investors with bigger budgets don’t have to be as concerned with finding a property with high rental yields. As a general rule of thumb, properties with higher rental yields will record lower capital growth, and vice versa. Therefore, investors also need to consider why they’re buying an investment property – for rental income or for capital growth?

Insurance. There are a number of different insurances that investors can buy to help protect themselves, their assets and to minimise risk. These include income protection insurance, landlord protection insurance and life insurance, among others. In the event that you fall ill, lose your job or your property is damaged, these types of insurances will help cover financial loss and keep your investment journey on track.

By factoring in the associated holding costs of an investment property, you’ll minimise the risk of financial difficulties in the future after acquiring your property.

4 factors for choosing a builder for your next property development

To secure the most competitive contract for your next residential property development, thorough due diligence of potential builders is essential. Here are 4 factors that need to be considered to help you make the right decision.

The quality, timeliness, cost and overall service provided by residential builders varies dramatically from company to company, which is why adequate due diligence is important.

To help select the best builder for your project, here are 4 factors that need to be considered.

Don’t necessarily choose the cheapest builder.

While it might be tempting to choose the builder with the cheapest quote, it’s important to consider the quality of their work. By choosing a builder with low specifications, it may cost you more in the long run, as errors may need to be rectified or low-quality building specifications may lead to poor finishes

Consider the type of projects the builder specialises in.

Builders won’t be specialists in all construction types, so it’s important to choose a builder with recent experience in the type of project you’re completing, whether it be a group of villas, apartments, or a triplex. For example, if your development is a group of 2-storey townhouses, engage builders with plenty of prior and recent experience with these types of projects.

What clauses are in the contract?

While price is important, part of the negotiation will need to cover contractual conditions. Does the builder want to include any favourable conditions for themselves, such as inclement weather provisions that provide them with more time to complete the build in the advent of extreme weather? On the other hand, will they allow you to include clauses for penalties in the event that they don’t complete the build on time, or any other special conditions?

What is the financial standing of the builder?

Make sure the builder has a strong financial standing to ensure they’re likely to remain operating in the near and long-term. If the builder goes broke halfway through your build, you’ll have to appoint another builder, which can be very difficult and will lead to delays and extra costs. There are also implications if the builder closes after the project is complete, as your building warranty could become void and defaults may not be able to be rectified. To gain a good understanding of the builder’s finances visit some of their worksites and speak to their trades to see if they are paid on time. You can also ask the company for their latest tax invoice or order independent reports about builder’s finances and risk profiles.

By failing to complete adequate due diligence on builders, you increase the risk of ending up with a poorly built product as well as increase the chances of time and cost blowouts.

So it’s easy to see why it’s highly beneficial to complete thorough research and choose your builder wisely.

Suburb bursting with historic charm

Guildford was one of three towns established during the founding of Perth’s Swan River Colony in 1829.

The historic suburb, known for its colonial architecture, is located in the City of Swan approximately 13 kilometres north-east of the Perth CBD.

It is bound by the Swan River in the west and north, and Helena River in the South.

Its population of 1,882 has a median age of 42 years with 32% identifying as professionals, which is significantly higher than the state average of 19.9%. 14% identify as clerical and administrative workers and 14% as managers.

Housing in the area is predominantly low-density residential with commercial along the main thoroughfare, James Street.

About 83% of stock is classified as houses, 11% as semi-detached or townhouses and 5% as flats, units or apartments.

About a quarter of stock is being rented (26%) and 72% of properties are either owned outright or being purchased.

The median house price for the area is $650,000.

Neighbouring suburbs include Bassendean to the west, South Guildford to the south and Woodbridge to the east.

There is good schooling in the area including Guildford Grammar School and Guildford Primary School.

Features of the suburb include Fish Market Reserve, Stirling Square and Guildford Hotel, while nearby amenities include the Swan Valley, Perth Airport and Midland Gate Shopping Centre.

It also features good public transport with the Midland train line cutting through the suburb offering two stations, as well as bus routes along James Street and Great Eastern Highway.

Deals and Don’ts – Morley, Edgewater, Spearwood

Here we take a look at just some of the different properties on the market and explain why they’re either deals (that represent a good investment) or don’ts (that should be carefully avoided by investors).

Deals

Morley

Purchase price: $520,000 Purchase date: January 2017 Block size: 359sqm Specification: 3 bedroom, 2 bathroom duplex built in 2012, zoned R20/25.

Deal: This property represents a deal as it offers a high specification finish and strong cash flow with a 4.23% rental yield. The duplex is just 9 kilometres from the CBD and has a good 359sqm land holding for a relatively new asset.

Edgewater

Purchase price: $480,000 Purchase date: January 2017 Block size: 723sqm Specification: 4 bedroom, 2 bathroom house built in 1982, zoned R20/40.

Deal: This property represents a deal given its strong development potential, being zoned R20/40 and situated on a corner block, which would allow for an enhanced development design. The dwelling is also in a highly rentable condition with 4 bedrooms and multiple bathrooms suited to families, and delivering an estimated rental yield of 4.55%.

Spearwood

Purchase price: $478,000 Purchase date: January 2017 Block size: 693sqm Specification: 3 bedroom, 1 bathroom house built in 1972, zoned R30/40.

Deal: This property represents a deal given its location opposite a park and high development potential, being zoned R30/40. While the fitout is basic the property would offer estimated rental yields of 3.21% and represents a good land holding.

Don’ts

Wembley

For sale price: $240,000 Specification: 2 bedroom, 1 bathroom apartment

Don’t: This property doesn’t represent a good investment because it is located on a busy road in a large 126-unit complex. The complex is dated and poorly presented with little chance of revitalisation due to the strata-ownership style. State housing is prevalent in the area due to the affordable nature of the property types surrounding. Currently 5 properties are for sale in the complex, showing continual supply being added. The property was on the market for sale for 151 days in 2016, and has been re-marketed in 2017 being on the market for over 60 days without sale.

6 top reasons to consider residential development syndicates

Residential development syndicates are often touted as highly lucrative, but are there other reasons sophisticated investors are choosing this investment type?

Many investors will, at some stage in their journey, consider developing a property on their own. But is direct development always the best strategy, or can joining a development syndicate be a more appropriate option?

Here are 6 top reasons to consider residential development syndicates as part of your investment strategy:

Access to larger, higher-quality investments

Development syndicates will often be multimillion dollar projects that the large majority of individual investors simply couldn’t fund by themselves. Even for high-net-worth individuals, who could bank-roll such projects, the risk of putting all their funds into one project is simply too high. Development syndicates allow investors to access these larger, higher-returning investments that are otherwise out of reach for many.

Lower capital investment

Instead of undertaking your own development or buying an investment property, which would cost potentially $1 million-plus, residential development syndicates generally require a minimum investment of between $50,000-$100,000, making the capital outlay significantly lower.

Greater diversification of assets

As the capital outlay is lower, investors are able to spread their funds across multiple investments. This could be in several residential development syndicates or incorporating commercial syndicates or direct commercial or residential property investment into their portfolio as well. By holding a greater diversification of assets, investors are effectively mitigating their risks.

Shorter-term investments

Residential development syndicates often provide investment terms of 2-3 years, providing returns in a much shorter timeframe compared to direct residential investment.

Managed by professionals

Provided you engage a company with a good track record, residential development syndicates will be managed by a team of professionals who can utilise their expertise to secure the best results for the project. They will take care of researching and negotiating the acquisition of a development site to planning approvals and ensuring the designs are targeted to the right target market. For individual investors wanting to undertake a development, it can be extremely time consuming and difficult to manage all this on their own, which is why residential development syndicates can be a better option.

Less stress than completing your own development

Residential development syndicates are managed by a professional team, meaning investors only have to provide the funds and wait for the returns at the end of the project. The syndicator will complete all the work, from finding and acquiring the site, to assisting with project designs and approvals as well as construction and sales of the project. Good syndicators will provide investors with regular updates regarding the progress of the project.

Residential development syndicates can offer unique opportunities to investors, but that doesn’t mean they are suited to everyone. It is recommended to speak to an advisor to determine how these residential development syndicates fit into your investment strategy.

Can you profit from flipping property?

Judging from all the property “reno” shows on TV, property flipping seems like easy money. But can you actually make a profit from flipping property?

The short answer is yes, you can make money from flipping property. However, it’s not as easy as it’s made out to be on reality TV, and there are a number of issues investors need to be aware of.

Firstly, the risk is much higher when flipping property.

If you’re considering flipping property, you need to be able to stick to a budget, and have a good understanding of costings.

For example, if you allocate $20,000 to renovate a property, do you know how much it will cost to repaint the interior or update the kitchen cabinetry? What about installing new blinds or replacing rusted gutters?

Unfortunately, if you don’t get the numbers right you could be facing a cost blowout, which will impact your bottom line.

You’ll likely have to choose which areas to spend the money as well – so would you receive a better rate of return by upgrading the façade, or should you focus on spending money in the alfresco area instead?

Once you start renovating you might discover more issues that need to be rectified or repaired, which could also lead to cost overruns.

There is also the risk that market conditions could change. If you acquire a property to flip in an upcycle, the market may have turned by the time you’ve finished the renovations and advertised the property for sale. This could create significant financial trouble as you may be forced to sell at a loss.

There are also the high imposts you have to consider when buying and selling property, such as stamp duty, capital gains tax and selling agents fees, which all eat into your margin.

While there are the risks with budget blowouts and market conditions changing, the fact of the matter is that flipping property is extremely time consuming, having to source quotes, choose fixtures and finishes and liaising with trades etc.

Unfortunately, most of us don’t have the time required to flip property because we have our careers to focus on.

That’s why, for the very large majority of investors, flipping property isn’t a good option.

It’s a better idea to buy high-quality properties that will grow in value over time and hold them for the long-term.

This way investors can still grow their wealth through property, but have the time to focus on their careers and enjoy their weekends off.

For more information on the buy-and-hold strategy, download Momentum Wealth’s new podcast series, The Property Investing Masterclass, which explores the fundamentals of residential and commercial property investing that every investor should know, regardless of age or experience.

Should I engage a builder or a designer for project plans?

Many builders offer in-house project design services, but is this the best option, or should investors engage an architect or designer for plans?

While it might seem more convenient to use one company to complete your design plans and build your development, the truth is it could cost you more in the long run.

Generally it’s best to engage an architect or building designer to draw your project plans, rather than going to a builder direct.

By utilising an architect or a designer, you will own the copyright to the plans, allowing you to tender the project to several builders to secure the most competitive bid (i.e. best price and contract conditions).

On the other hand, if you engage a builder to complete the plans, typically they will own the designs – therefore you can’t compare quotes from other builders.

If you decide to not build with that company, then you’ll be forced to pay thousands of dollars to buy the plans, or worse still, the builder may not sell them to you, meaning you’ll have to start from scratch.

When searching for a designer, make sure they have an understanding of your budget and experience with similar types of projects to yours (i.e. a duplex, multi-storey townhouses, apartment complex etc).

Just because the plans for a project have been drawn, doesn’t necessarily mean the project can be built.

There may be limitations to what’s possible, either technically or financially, so it’s important to engage a designer with experience with similar projects so they can produce designs that are practical and within your budget.

For more information on property development, download Momentum Wealth’s new podcast series, The Property Investing Masterclass, which explores the fundamentals of residential and commercial property investing that every investor should know, regardless of age or experience.

What’s the difference between survey strata and built strata?

Strata titles are common in Western Australia, particularly for specific types of dwelling stock, such as villas and apartments. But what’s the difference between survey strata and built strata?

Strata titles allow buyers to gain ownership of part of a property but share ownership of other areas of that complex.

Property types that are often strata titled include duplexes, villas, townhouses and apartments, and you’ll often hear that they’re either survey strata or built strata.

Quite simply, survey strata is surveyed by a licensed land surveyor and the land boundaries are shown as survey marks on the survey-strata plan – this does not define any buildings.

Built strata is the original form of the strata scheme and typically comes in 2 forms – those established prior to June 30, 1985, and those established after.

Prior to this date, built strata lots could only be within a building (i.e. ownership was only for everything inside the dwelling). However after this date, part of the lot could also be the land outside the building and may also include the building structure. (i.e. the exterior of the building including external walls)

As an investor considering buying a strata-titled property, it’s crucial to read and understand the strata plan.

The strata plan provides lot ownership information and relevant by-laws that set out what you can and can’t do with the property, as well as what you technically own.

For example, when buying a built-strata unit, do you own the associated car park and/or courtyard? The answer to this will have implications on insurance, maintenance (i.e. who’s responsible for these areas) and permission to alter exterior surfaces of buildings etc.

By-laws will vary from complex to complex but could include:

1. Lot owners can’t amend the exterior of the property (e.g. solar panels, Foxtel dishes, roller shutters, tinting windows etc)
2. Floor tiling is not allowed
3. Pools and spas in common areas only allowed for those 16 years or older
4. Lot owners may not reallocate their car bays
5. No clotheslines on balconies

These are just a few of some of the possible by-laws set out in a strata plan.

Before buying a property it’s best to always refer to the strata plan yourself.

For more information on property management, subscribe to Momentum Wealth’s new podcast series, The Property Investing Masterclass, which explores the fundamentals of residential and commercial property investing that every investor should know, regardless of age or experience.

Major mall upgrade to boost suburb’s amenity

This south-of-the-river suburb is packed with amenity, and its offering is only going to be enhanced with a slated $750 million redevelopment of a local shopping centre.

Booragoon is located in the City of Melville, approximately 9.5 kilometres south of the Perth CBD.

Its neighbouring suburbs include Ardross (north), Mount Pleasant and Brentwood (east), Winthrop (south) and Alfred Cove and Myaree (west).

The population of Booragoon is 5,461, with a median age of 43 years.

The median house price is $880,000 with the dwelling stock comprising 79% housing, 17% semi-detached and 5% units.

While Booragoon has predominantly been low-density residential houses, new rezoning for medium and high-density stock around Garden City Shopping Centre, Riseley Street, Marmion Avenue and Leach highway will encourage a more diverse range of grouped and multiple dwellings.

Booragoon features high-quality amenity including the Melville Aquatic Fitness Centre, Booragoon Lake Reserve, Len Shearer Reserve and Booragoon Primary School as well as the Garden City Shopping Centre.

Both Canning and Swan Rivers are within 2km of the suburb as well.

In what will become another major drawcard for the area, Garden City is scheduled to undergo a $750 million redevelopment commencing in late 2017.

The upgrade will take about 3 years to complete and increase retail space by 43,000sqm with the number of stores rising from 190 to around 400.

Part of the redevelopment will include a comprehensive main street casual dining and leisure precinct, new cinema complex, assortment of fresh food and large format international fast fashion retailers and flagship stores.

Looking into the long term, Perth’s transport plan for 3.5 million residents identified Booragoon as a key secondary centre where new rail infrastructure will connect Booragoon north under the Swan River to Queen Elizabeth II Medical Centre and the University of Western Australia, as well as south to Murdoch Station.

This slated transport project would vastly improve the accessibility of Booragoon in the coming decades.

The suburb is bordered by Davy Street, Almondbury Road and Coomoora Road in the north, Norma Road in the west, Leach Highway in the south and Rogerson Road in the east.

Its main arterial roads include Kwinana Freeway, Leach Highway, Riseley Street and Marmion Street.

The suburb also features the Booragoon Bus Station, which is located at Garden City Shopping Centre.

32% of workers identify as professionals (19.9% WA, 21.3% nationally), while 15% are managers and 14% clerical and administrative workers.

For more information on how to find an investment-grade suburb, download Momentum Wealth’s new podcast series, The Property Investing Masterclass, which explores the fundamentals of residential and commercial property investing that every investor should know, regardless of age or experience.

Deals and Don’ts – Redcliffe, St James, Greenwood

Deals

Redcliffe Purchase price: $545,000 Purchase date: October 2016 Block size: 809sqm block Specification: 3 bedroom, 1 bathroom house built in 1979, zoned R20.

Deal: This property represents a deal as it is located nearby the soon-to-be built Redcliffe Train Station, which is part of the Forrestfield-Airport Link that is under construction. The new train station will provide great amenity to the area and the property is also subject to draft rezoning, which is likely to allow medium density development on the site. In addition to this the property is also in close proximity to the Perth CBD and Perth Airport. The property has also been recently renovated.

St James Purchase price: $490,000 Purchase date: October 2016 Block size: 582sqm Specification: 2 bedroom, 1 bathroom built in 1954, zoned R20.

Deal: This property represents a deal given its low price point and future development potential – the property is subject to rezoning as a draft R40. It is also in close proximity to Curtin University and the Perth CBD, which are two major employment and education hubs.

Greenwood Purchase price: $560,000 Purchase date: October 2016 Block size: 690sqm Specification: 4 bedroom, 2 bathroom house built in 1987, zoned R20/40.

Deal: This property represents a deal primarily because of its strong development potential being R20/40 and on a corner block, which allows for enhanced project design. The property also has good accessibility to Mitchell Freeway and Greenwood Train Station and is in good rentable condition making it suitable for a family.

Don’t

Queens Park For sale price: $340,000 Block size: 222sqm Specification: 3 bedroom, 2 bathroom villa built in 2001

Don’t: This property doesn’t represent a good investment because it is located on a fairly major road in a large homogenous complex of 12 villas. The property is surrounded by medium-density zoning, which will add to supply levels, most likely of similar villa stock, restraining capital growth and rental yields. The property is also under the flight path adding to noise pollution.

Finding the best location and commercial property for your budget

When buying a commercial property to establish a new business, the location and specifications of the premises are key.

However, as is the case with most start-ups, finances are tight given expenses are high and income is low, or perhaps non-existent.

In most cases, this means compromise, which was the case for one entrepreneur who was establishing a stand-up paddle board distribution centre in Perth.

This client engaged us with a $400,000 budget requiring a 140 – 150 square metre premise comprising mainly warehouse space, but he also wanted a small office and a showroom area as well.

The sticking point in the client’s brief, though, was that he wanted to buy the property in Balcatta, which is regarded as one of Perth’s premium industrial locations.

Knowing the local market, we advised the client that finding a suitable property within his budget in Balcatta would be near impossible.

With no room to expand his financial capacity, we advised the client that we’d search for properties in other locations that suited his budget and criteria, but we’d also examine Balcatta nonetheless.

While Balcatta was all but out of the question, our consultants were confident that, with assistance from our in-house research department, we could find a suitable property in a location that met the client’s needs.

With this in mind, we identified Wangara and Malaga as two appropriate areas to establish his stand-up paddle board distribution centre.

After an extensive search, our campaign confirmed what we had already known – Balcatta was too expensive for the client’s budget.

We advised the client that if he was determined to establish the company in Balcatta, there were a number of leasing options available that we had identified.

However, set on buying his own premises, the client valued our advice and decided he would be happy to consider the other locations that we’d also investigated – Malaga and Wangara. We recommended Malaga as his best option.

Providing the client with a shortlist of properties that we could walk him through and explain the benefits and drawbacks of each, the client eventually decided on a 143sqm site which we were able to negotiate the purchase price and contract terms.

While Malaga isn’t regarded as much as a premium industrial suburb as Balcatta, the former is still relatively central being just 11 kilometres from the Perth CBD, and it comprises property that, although generally older, offers great value for money.

More importantly, as a distribution centre, it fits the client’s needs given that Malaga borders Reid Highway, which is connected to Perth’s major arterial roads providing good connectivity to key retailers.

As an added bonus, we were able to acquire the property for just $310,000 – well below the client’s budget – which provided him with more financial capacity for other aspects of establishing his business.

Momentum Wealth Golden Guinea Fund

Target returns: 

17.5% per annum*

*based on the total return per annum over a 24 month investment term.

INVEST WITH CONFIDENCE

Fixed price building contract and planning approval completed means reduced risk from cost variations

Backed by director – key staff members have also invested and are personally guiding the project

Preferential equity – new investors receive preferential returns over existing investors

24 month investment term

STRONG INVESTMENT FEATURES

Established area with low supply and growing demand

Strong infrastructure – Fiona Stanley Hospital and Murdoch Health Precinct, Murdoch Activity Centre, Garden City expansion, Port Coogee Marina and more

Strong market fundamentals – as at December 2016, percentage of stock on market for sale is 1.16%* and rental vacancy rate is at 2.4%* *sourced from realestate.com.au and REIWA December 2016

LOCATION

The keystone of the suburb is the large leafy reserve located right in the heart of Samson. The Golden Guinea Fund project is set directly opposite this urban oasis, providing investors with access to a well-positioned metropolitan lifestyle that has the best of both worlds.

ELIGIBILITY

This syndicate is open to anyone** who meets one of the following criteria:

Combined gross income of more than $250,000 per annum (which includes gross rent, income from other investments and business turnover)

$2.5 million in net assets

Is able to invest $500,000 or more

** must be a wholesale investor under the Corporations Act (2001)

Pendragon Capital Ltd AFSL 237549

Deals and Don’ts – Eden Hill, Edgewater, South Lake

Eden Hill

Purchase price: $430,000 Purchase date: October 2016 Block size: 669sqm Specification: 3 bedroom, 1 bathroom dwelling, zoned R17.5

Deal: This property represents a deal because of its great condition (being recently renovated) coupled with its future development potential – using the corner zoning discretion and the 5% variation its zoning could be increased to R25. The cheap price point and the fact Eden Hill is a gentrifying suburb along with the individual benefits of the property with its location opposite a park make for good long-term growth prospects.

Edgewater

Purchase price: $532,000 Purchase date: October 2016 Block size: 789sqm block Specification: 4 bedroom, 2 bathroom house built in 1984, zoned R20/40.

Deal: This property represents a deal for its strong development potential being zoned R20/40, in addition with its location on a corner block, which will allow for enhanced development designs. It is also in a highly rentable condition featuring 4 bedrooms and 2 bathrooms making it suitable for a family.

South Lake

Purchase price: $450,000 Purchase date: October 2016 Block size: 775sqm Specification: 3 bedroom, 1 bathroom house built in 1987, zoned R20.

Deal: This property represents a deal because it neighbours a park and is subject to rezoning as a draft R60. The property also presents well with a basic internal presentation that is clean and liveable.

Don’ts – Applecross

For sale price: $299,000 Specification: 2 bedroom, 1 bathroom apartment in a complex of 21 built in 1964

Don’t: This property doesn’t represent a good investment because it is located on a busy road in an aging flat-style complex with other affordable housing. The complex is dated and poorly presented with little chance of revitalisation due to the strata ownership style. A number of new large-scale apartment developments from the nearby Canning Bridge precinct will also add significant new apartment stock to the area, which will contain future capital growth.

Suburb snapshot: Cottesloe

Cottesloe was established in the 1800s with the opening of the Fremantle train line and is now one of Perth’s most prestigious postcodes.

The beach-side suburb is located in the Town of Cottesloe, approximately 10 kilometres southwest of the Perth CBD.

Growth in the area took off in the 1890s, spurred by the opening of the Perth-Fremantle railway line.

Significant development occurred during the 1910s and 1920s aided by the promotion of the beachfront.

Today, there are four train stations in the suburb on the Fremantle train line including Victoria Street, Mosman Park, Cottesloe and Grant Street Station.

Neighbouring suburbs include Swanbourne (north), Peppermint Grove (west) and Mosman Park (south-west).

Cottesloe has a population of 7,398 with a median age of 40.

The median house price in the suburb is $1.7 million and features a mix of dwelling types consisting of 70% houses, 11% semi-detached and 19% flats and apartments.

66% of properties are either owned outright or being purchased, with 32% of properties being rented.

A massive 43.6% of residents identify as professionals, which is twice as high as the state and national averages at 19.9% and 21.3% respectively.

The suburb’s main features include the Cottesloe Beach, Sea View Golf Club, Cottesloe Central Shopping Centre and North Cottesloe Primary School.

The popular Claremont Quarter is also nearby, as well as the Swan River and Allen Park.

The suburb is bound by the Indian Ocean in the west, North Street in the north and Stirling Highway in the east, and features Stirling Highway and West Coast Highway as its main arterial roads.

Specialist medical loans – not so special?

Are you a medical professional seeking finance? Some lenders offer special deals for those in the medical industry, such as doctors, physiotherapists and dentists, among others. But are these exclusive loans all they’re cracked up to be?

A wide variety of lenders offer special rates and fee packages for medical professionals, including GPs, specialists, surgeons, vets, physiotherapists and dentists, among others.

While some of these deals might seem great, it’s important to examine the lending requirements and structures more closely before signing on the dotted line.

Cross collateralisation risks

Some lenders will require such special loans to be cross collateralised, which can tie you to a particular lender and restrict your lending capacity in the future.

This might not be specified upfront, so it pays to ask, and the lender may require security over your business.

This can create problems when it comes time to review your loan, and in the event that one of your properties underperforms, you may not be able to secure finance again or could even be forced to sell your property.

No LMI loans

Some lenders also offer a ‘no lenders mortgage insurance loan’, which can be an advantage for some borrowers and help them purchase their property sooner.

However, in some cases, the total cost of the loan over the period of time (including rates, charges etc) is higher than the saving, meaning it’s not a better option in the long term.

One 100% loan – or is it?

There are also 100% loans on offer to medical professionals, meaning you’ll require no deposit or lenders mortgage insurance.

In some instances this can actually be 2 loans though, consisting of an 80% loan with one lender and a 20% loan with a second lender. The second loan is usually at a higher rate though (presently about 8%).

In these circumstances it may be better to save a 10% deposit and apply for a 90% loan – with no lenders mortgage insurance – rather than pay the extra costs.

Obtaining a specialist package can be beneficial, but it’s essential to compare your options and understand the fine print before committing.

A good finance broker will be able to assist you with this, and recommend packages that suit your individual circumstances and work for you now and into the future.

Should I undertake my own development or join a development syndicate?

Many investors aspire to undertake a residential property development at some point in their investment journey, but is it better to complete your own project or join a development syndicate?

Whether developing yourself or through a syndicate, when done right there is no question that the end result can be highly lucrative.

More often than not, though, aspirational developers only hear about the big profits on offer and don’t understand the amount of time and effort required to complete a residential property development themselves.

As such, if you want to undertake a development on your own, it’s advised to engage a project manager, who can oversee the build on your behalf.

A good project manager will be able to guide you through the entire process, from designs and approvals, to selecting a builder and tendering work, as well as monitoring the progress of the project to completion.

This option allows you to have a high degree of control over the project, while having peace of mind and conviction in your decisions as you’re being advised by a professional.

Comparatively, a development syndicate is a much more passive means of property development.

Investors have little input into the process as the syndicator manages the project and has final say on all aspects of the development. That includes the final designs and fittings and fixtures to choosing the builder and trades etc.

Investors are kept up to date with regular progress reports, but it’s as simple as investing your funds and waiting for the syndicator to hand back the profits at the end of the project.

If you ask anyone who has completed a property development themselves, they’ll confirm that it’s essentially a full-time job, as you need to manage a vast array of consultants and the builder through the entire process.

This is why engaging a project manager to help you or choosing to invest in a development syndicate can be a much wiser option than developing on your own.

What’s the best type of investment property to buy?

When searching for your first investment property, investors are spoilt for choice, whether it be a house, apartment or villa. But what’s the best type of investment property to buy?

The answer to this question will largely depend on your own unique circumstances because the different types of properties offer different pros and cons.

Smart investors understand that they must acquire properties that work in tandem with their own investment goals, financial capacity, life circumstances and risk profile.

For example, if you have a high risk tolerance you may prefer a development site. If you don’t have a high disposable income, a villa that is neutrally geared might suit you better, and so on.

So what are the advantages and disadvantages of different types of investment properties?

Here’s a quick overview of the different benefits and disadvantages that are typically offered by houses, apartments and villas.

Houses

Benefits

• Usually better capital growth prospects compared to apartments and villas
• Relatively easy to add-value to through renovations/redevelopment
• Greater control over the asset

Disadvantages

• Lower rental yields compared to apartments and villas
• Greater maintenance required, which often means higher expenses
• Higher price point

Apartments

Benefits

• Higher rental yields compared to houses
• Often better rental returns, meaning lower or no holding costs
• Less maintenance required

Disadvantages

• Usually lower capital growth prospects compared to houses and villas
• Strata fees can be high, particularly if the complex has large common areas, such as pools and lifts
• Less control over the property with limitations for renovations due to strata bylaws
• More competition for tenants and buyers, particularly in large complexes and in areas where apartments are highly prevalent (i.e. CBDs)

Villas/townhouses

Benefits

• Relatively good capital growth prospects (not as good as houses though)
• Relatively good rental yields (not as good as apartments though)
• Ability to renovate the property (unless it’s restricted in the bylaws),
• Lower price point than houses

Disadvantages

• Strata restrictions can limit what you can do with the property
• Less control in terms of renovation options
• Fairly homogenous, similar to apartments, meaning there can be more competition when selling or leasing

Investors should also consider other investment options like development sites, commercial property as well as development and commercial syndicates in their investment plans, which are often part of the portfolio for more experienced investors. First time investors should generally start by looking at houses, villas or apartments, but again, individual risk appetites and circumstances apply.

Why you need to start your property investment portfolio in 2017

If you haven’t yet kicked off your property portfolio, here’s why you should start your property investment in 2017.

Most people are aware that property investment can be a great wealth creator, however many of us fail to act.

The reasons for this are varied, but typically centre on short-term matters.

For example, when property markets are booming people are typically concerned about property bubbles – they don’t want to buy at the peak and be part of a market ‘crash’, so no action is taken.

On the other hand, when the market is in a slump many are not imagining any recovery, believing that prices will only continue to fall, and again no action is taken.

While it would be great if property prices rose steadily in a straight line, the cyclical nature of property markets – as demand and supply drivers move up and down – means that this is not the case.

Although there are ebbs and flows in the property cycle, history has shown us that property prices in Australia’s capital cities have continued to rise over the long term.

Therefore, investors need to take a long-term view when considering investing in property and put the short-term matters into context.

So why should you start your property investment in 2017?

Two reasons.

1) the earlier you start the better, and;

2) the stats are indicating that 2017 will be the year to invest.

Get in as early as you can

The sooner you start the more time you’ll have in the market to capture compound growth on your property (i.e. you’ll have more time to create greater personal wealth).

So a $500,000 property acquired today that achieves 5% per annum growth over 10 years will be worth $818,334. That’s an additional $318,334 from the initial purchase price.

But hold that property for 20 years and it will be worth $1,339,341. That’s an additional $839,241 from the initial purchase price.

By holding the property for 20 years (instead of 10 years), the property can make a further $520,907.

Therefore, the sooner you start investing the more opportunity you’ll have to capture compound growth.

As the saying goes, it’s about time ‘in’ the market, not ‘timing’ the market.

While starting your property portfolio sooner rather than later is beneficial to achieve greater wealth, investors need to ensure they acquire high-quality properties that will outperform the market over the long-term.

2017: The year to invest

An increasing number of experts, media and recently released statistics have suggested that the Perth residential property market is primed for investment in 2017.

The latest data released by the Real Estate Institute of Western Australia (REIWA) shows that Perth’s preliminary median house price for the December 2016 quarter did not change from $520,000, which is a positive sign, as historically once all sales have settled this preliminary median generally increases, so Perth could in fact record an increase in price over the quarter.

Sales activity is increasing with the preliminary dwelling sales for the December quarter 2016 five per cent higher than the same time in 2015. For the week ending 31st of January 2017, property listings were down about 2% year on year, indicating that some of the excess supply in the market is starting to be absorbed.

Great time to buy right

Buying strategy is just as important as timing in order to maximise the benefits of any approaching upswing. Investors who examine potential demographic, social, infrastructure and planning changes will have the best chance in purchasing a property that will outperform the market.

For example, in 2007, our research team identified the City of Belmont as an investment-grade suburb with strong short and long term growth drivers exposing many of our clients to the rapid price growth that occurred in this area.

3 things to do before buying an investment property

Are you looking to purchase an investment property soon? Amid what is traditionally the busiest time of the year for property markets, make sure you’re buyer ready before buying an investment property.

With the spring season well and truly underway, property markets around Australia are entering a state of heightened activity in what is usually the busiest period of the year.

For those willing and able to buy an investment property right now, this can mean more stock on market, and subsequently a wider choice of properties. However, it can also mean increased competition as more buyers come to market as well.

With increased competition, investors need to be adequately prepared so they’re best placed when the time comes to make an offer.

So what should investors do to ensure they’re buyer ready? Here are 3 tasks to complete before heading out to the market.

• Review your household budget. While you should update your household budget as your circumstances change, you should review your budget before acquiring an investment property so you have an up-to-date understanding of your cash-flow position. You may have additional expenses or income that you have failed to factor in, which could have a significant impact on your borrowing capacity or general finances.

• Book an appointment with your broker. Meet with your mortgage broker to ensure your finance structures remain relevant and to secure pre-approval for an investment loan. The pre-approval will be more attractive to sellers and may be the difference between your offer and another buyer’s offer that is pending finance.

• Know what to look for. Many beginner investors aren’t aware of the different types of property investment options and what’s best for their individual circumstances. For example, typically established houses have high capital growth prospects but low rental returns, whereas the opposite is typically true of some apartments. Villas and townhouses also have their own pros and cons, as do commercial property investments and development properties. Therefore, investors need to understand what type of investment best suits their circumstances and needs, as this will save significant time when searching the market and attending open inspections.However, even in the face of heightened competition, buyers should still complete adequate inspections, including pest, electrical and structural, for example, to ensure the property doesn’t present any surprise defects after settlement.
• For direct property investments, whether it be a house, townhouse or other, it’s important to act swiftly when you find a property that meets your criteria. This includes liaising with the sales agent to obtain the necessary information about the seller’s circumstances and placing reasonable, but strong, offers to best position yourself to secure the property.

Finding a development site

After countless hours of market research and attending dozens of home opens in the hopes of finding a development site, you’ve finally found a site that looks set to deliver a huge financial windfall. But will it live up to your expectations?

When purchasing a property with plans for future development, it’s important to hold a comprehensive understanding of the local council planning scheme to ensure the property meets the necessary criteria.

Typically, land appreciates in value while buildings depreciate, meaning a property with a higher land value proportion has better prospects for capital growth.

Therefore, development sites generally appreciate quicker than those without development potential due to the increased value in the land derived by this ability to develop. (Development sites typically cost more to hold though as existing dwellings are typically older and don’t command as much rent and require more maintenance expenses).

However, if planning polices and scheme clauses limit the site’s development potential, then the capital growth prospects can be restrained.

For example, it’s not uncommon for investors to purchase a split-zoned property (such as R40/60) only to find out later that the site doesn’t meet the dual-density criteria needed to gain the higher coding.

This can severely affect an investor’s strategy, and financial standing, as they may only be able to develop a fraction of the number of apartments they had planned.

If you think you’ve found the perfect development site, it’s important to gain a comprehensive understanding of the relevant local council planning policy before placing an offer.

Failing to do so may leave you with a property that doesn’t live up to your development expectations and could cause significant financial loss.

3 tips to develop a successful medical centre

With the rising prominence of healthcare, many investors and industry professionals are seeking to develop new local medical centres. But what needs to be considered to help find the right location for such specialist projects?

Whether it be for industrial, retail, medical or another purpose, the end-use of a commercial development should play a major role in deciding the location of the project.

So what needs to be considered if you want to develop a local medical centre? Here are 3 factors that need to be evaluated before taking the plunge.

1. Area/centre make-up Some highly developed areas seem like a logical choice to build a medical centre but the local mix of owners, tenants or business may not be right. For example, there may be too many investors instead of business owner-occupiers in the area, which can lead to higher vacancies as tenants come and go. This can lead to lower foot traffic and clientele and can detract from the area’s overall public appeal.
2. Nearby competitors While it can be beneficial for complementary medical providers to be in a local area, building a medical centre near direct competitors can make it hard to attract tenants or a potential buyer. This is because tenants or owner-occupier buyers will be reluctant to lease or buy a property next to a competitor.
3. Tenant/buyer referral business Is a prospective tenant or buyer going to be relying on referral sources for their business, like a specialist can rely on a general practitioner for clients? If so, make sure there is a referrer nearby or incorporate space in the development to attract one to your centre.By keeping these at the fore when searching for potential development sites, you’ll be in a stronger position to deliver a more unique project that leverages existing businesses and avoids competitors, which will be much more appealing to tenants/buyers and will ultimately optimise your returns.Thornlie would benefit greatly under Perth’s long-term planning blueprint with new rail projects identified for the area which would link to major employment and activity hubs.The suburb has a median house price of $450,000. Low-density single residential houses are the predominant dwelling type making up 94% of stock, followed by semi-detached and townhouses at 3% and flats and apartments at 3%.Features of the suburb include Spencer Village Shopping Centre, Thornlie Square Shopping Centre, South Metropolitan Tafe Thornlie Campus, Walter Padbury Park and Tom Bateman Sporting Complex Reserve.There are many schools in the area including 5 primary and 2 high schools. Of these 1 primary and high school are private.Thornlie is bounded by Canning River in the North, Warton Road in the East, Garden Street in the South and Roe Highway in the west. Its main arterial roads include Roe Highway, Spencer Road, Albany Highway and Nicholson Road, and the suburb also features the Thornlie train station in the north as well as bus routes on main arterial roads.The plan showed an extension of the existing Thornlie line to extend through to Cockburn Station and the Mandurah Line.These new rail infrastructure projects, if committed to, would significantly increase accessibility to and from Thornlie, improving cross mobility and provide direct access to the airport and Murdoch Activity Centre (both large employment centres).
4. As Thornlie gentrifies, there is likely to be increased redevelopment, particularly around Thornlie train station and Spencer Village Shopping Centre, where there are higher zonings already in place.
5. Longer term beyond 3.5 million residents, the Forrestfield Airport-link would be extended to Thornlie Station as well.
6. The state government’s long-term transport blueprint, Transport at 3.5 Million, has identified new rail infrastructure that will greatly benefit Thornlie.
7. It has a population of about 22,965 residents with a median age of 36 years, of which about 18.6% identify as technicians and trades workers (which is higher than the state average of 16.7%), while 16.9% identify as clerical and administrative workers and 14% as professionals.
8. Westfield Carousel is also nearby being just 4 kilometres away.
9. About 77% of houses are either owned outright or being purchased while 20% are being rented.
10. Located within the City of Gosnells about 18 kilometres south east of the Perth CBD, Thornlie is a large residential suburb established mainly between the 1950s and 1980s with some commercial areas and state housing scattered throughout.
11. Suburb snapshot: Thornlie
12. When considering developing a commercial medical centre, it’s important to understand the needs of the target tenant/buyer, their nearby competitors, the local supply and demand factors of similar stock and the owner-occupier/investor mix.

Deals and Don’ts – November 2016

In this section we take a look at just some of the different properties on the market and explain why they’re either deals (that represent a good investment) or don’ts (that should be carefully avoided by investors).

Deals

Edgewater

Purchase price: $570,000 Purchase date: September 2016 Block size: 710sqm Specification: 4 bedroom, 2 bathroom, 2 car bay house built in 1983, zoned R20/40.

Deal: This property represents a deal because of its close proximity to Edgewater train station, being just 800 metres away, in conjunction with its development potential. The property is also on a corner block and the large house is in a very rentable condition and features a pool.

Joondalup

Purchase price: $515,000 Purchase date: August 2016 Block size: 810sqm Specification: 4 bedroom, 2 bathroom house built in 1990, zoned R20/60.

Deal: The property features a well-built 1990 brick and tile house, and although it remains in original condition it is well presented with good rental capabilities. The 165sqm house sits on a large block, which has significant development potential and is located just 375 metres from Currambine train station.

Kallaroo

Purchase price: $510,000 Purchase date: August 2016 Block size: 683sqm Specification: 4 bedroom, 1 bathroom house built in 1972, zoned R20/40.

Deal: This property was purchased for a great price in a highly sought-after area that is close to the coast and Whitfords Shopping Centre.  It also offers significant development potential and the house is in good condition to rent, meaning little money would need to be outlaid by the owner for leasing. It also features a pool.

Don’ts

Bibra Lake

For sale price: $499,000 Specification: 3 bed, 1 bathroom house built in 1985, zoned R20 (draft R30).

Don’t: Although this property is located on a 700sqm corner lot and is a draft R30 zoning that could provide significant development potential, the major fault with this property is that it sits directly opposite land that has been earmarked for the Roe Highway extension, which forms part of the Perth Freight Link. This new piece of road infrastructure is likely to lead to increased traffic in the area, additional noise pollution and be an eyesore for nearby residents. This will likely be unappealing for future tenants or buyers, requiring discounting when leasing and restricting capital growth.

Commercial property investment fund launched

Momentum Wealth’s partner company, Mair Property Funds, has launched its latest investment fund, the MPF Retail Fund.

The aim of the fund is to provide investors with strong and secure investment returns from a quality selection of commercial retail centres with solid income returns and high potential for capital growth.

The first asset that MPF has secured (under contract) for the fund is a quality shopping centre in one of the fastest growing areas of South East Queensland.

The property is in a prominent location on a major arterial route in an area with a strong demographic profile and is less than 1 kilometre from the Petri University precinct.

Key tenants in the property include McDonalds, IGA and a medical centre and the fund offers projected distributions of 7.5% per annum paid quarterly.

The fund is open to retail investors with a minimum investment of $50,000.

The launch of the MPF Retail Fund comes on the back of the success of MPF’s MPS Diversified Property Trust.

Earlier this year, MPF purchased its third asset for the MPS Diversified Property Trust. The capital raising for the third asset was strongly supported by investors and closed oversubscribed.

If you’d like to find out more about the MPF Retail fund please call David Ellwood on 9321 5566 or email davide@mair.com.au

Bigger (infrastructure) not necessarily better for investors

Smaller community infrastructure projects can deliver better price growth to local property markets, because they’re more likely to deliver tangible benefits, such as improved amenity and upgraded streetscapes.

It’s simplistic to assume that big-ticket infrastructure developments will lead to higher house values, as smaller community projects can prove to be more beneficial for property investors.

When deciding on an investment location, it makes sense to consider areas that will benefit from new infrastructure projects, whether it be new roads, public transport, health or activity centres.

Such developments can lead to enhanced amenity and higher demand, which can boost local house prices.

However bigger isn’t necessarily better when it comes to infrastructure and property price growth, as outlined in a new report from Momentum Wealth’s research division.

Take the $1 billion Perth Stadium for example. The research report explains that the construction of large-scale football stadiums typically delivers negligible price growth for nearby residential properties.

Alternatively, smaller community infrastructure projects, such as the $24 million HBF Arena Upgrade in Joondalup, can deliver better price growth to local property markets because they’re more likely to deliver tangible benefits to the area, such as additional amenity (i.e. fitness or family centres) and upgraded streetscapes.

The research report also explains that investors also need to consider the less-obvious locations that are likely to benefit from new infrastructure, as these may make better investment locations.

The $49 million Ellenbrook Rapid Bus Transit System, for example, will benefit residents on Perth’s north-east urban fringe, specifically Ellenbrook and Aveley, through improved accessibility. However the Momentum Wealth research report reveals that the infrastructure will also help to support Morley, in Perth’s inner-metropolitan ring.

Morley represents a much smarter investment location because it’s significantly closer to the Perth CBD, the supply-side fundamentals are more favourable and it has been identified by the state government has a key suburban activity centre.

The Momentum Wealth research report, Perth Public Infrastructure Update Impacts on local property markets, has identified the city’s top government-funded infrastructure projects and provides unique insights and analysis as to how these developments may impact local property markets.

Perth is currently undergoing a once-in-a-generational transformation as the WA state government executes a massive infrastructure investment program that aims to enhance Perth’s useability and liveability as the city’s population grows to 3.5 million residents.

While new public infrastructure projects can be a good indicator for future residential property price growth, investors need to be aware of the different dynamics that are associated from project to project.

It’s also important that investors take a broader view when making investment decisions, and consider other factors other than new infrastructure projects.

Other property price drivers, such as housing demand and supply, demographic shifts and changing structure plans, for example, also need to be taken into account.

All but two Perth councils fail planning test

Just two of 29 Perth metropolitan councils have been given the tick for planning performance in a highly critical Property Council of Australia report to be released today.

Billed as the first independent assessment of its kind, the report found most councils were struggling to implement planning reforms, had outdated local planning schemes and did not monitor or review their performance.

The Department of Planning and WA Planning Commission were also criticised for taking too long to review new local planning schemes or amendments to existing schemes.

The Property Council has long been critical of the local government sector’s planning record, arguing inconsistencies hamper development and the State’s ability to meet its infill targets.

The cities of Melville and Belmont were the only councils deemed to have “a high level of planning performance” across strategic planning, statutory planning, delegation of approval to planning officers and timeliness of approvals.

Councils were assessed and given a score out of 23 based on whether they had a current local planning strategy, an up-to-date local planning scheme, appropriately delegated development applications to experts and processed planning applications within the required 60 days.

The report said performance monitoring in the planning system was “almost non-existent”.

The Town of Cambridge was the lowest ranked council because it had only just started work on a local planning strategy, had lower-than-average levels of delegation and no data on processing times.

Property Council WA executive director Lino Iacomella said the results were “concerning”.

Pockets of Perth property levelling out despite weak real estate market

POCKETS of Perth are showing signs of levelling out, despite the city’s overall market weakness.

Latest figures from CoreLogic RP Data rate Bateman, Hocking and Pearsall as the suburbs with the lowest average difference between the asking and selling price, amounting to a vendor discount of between 4 per cent and 4.2 per cent.

This is compared to higher-end suburbs, where the average vendor discount for Dalkeith, Cottesloe and Ascot is the highest at 12.9 per cent, 11.1 per cent and 10.7 per cent respectively.

Momentum Wealth managing director Damian Collins said in a balanced market the average vendor discount was 3-4 per cent, meaning Bateman was holding steady in the face of Perth’s property slump.

The average number of days a Bateman property stays on the market is 49, which is better than the Perth average of 88, and half Dalkeith’s 98 days.

Mr Collins said high-end properties typically attracted fewer buyers and in softer markets, these vendors had “to discount more to get the sale”.

“The most important thing is comparable sales, not necessarily comparable listing prices,” Mr Collins said.

Realmark Western Suburbs director Adam Gilbert said buyers still had the upper hand and those selling premium properties needed to consider true market value, not what they paid for a home.

“Sellers need to get a realistic assessment of price, meet it, go to auction or ask for offers,” he said.

First National Heron Johns licensee Jenny Gauci, who sells homes in Bateman, said properties priced realistically were selling well.

Bateman had experienced price falls, but they were not as extreme as in other suburbs because of what it had to offer.

“There is demand in Bateman for the school zone and it has good infrastructure, with two train stations and Fiona Stanley Hospital, and it is close to the freeway,” Ms Gauci said.

“The median price is affordable and it is at those homes where there is a lot more competition where we’re achieving better results.”

Tarryn and Jarrad Carlsen started their property search in Booragoon, but bought in Bateman because of the prices and proximity to schools and the freeway.

“We were looking for something we could move into without too much effort, but that had potential for renovations,” Mrs Carlsen said.

After researching prices and allowing for renovations, the Carlsens set a maximum of $750,000, a figure they felt was realistic in the current market.

“We looked at other homes that were perfectly maintained and renovated, but were quite a bit more expensive,” Mrs Carlsen said.

Town of Cambridge Town Scheme Amendment 31 rejected by Planning Minister Donna Faragher

JOHN Day has supported Planning Minister Donna Faragher’s decision to reject Town of Cambridge Town Scheme Amendment 31.

Mr Day was the previous planning minister who made changes to the Amendment in April before the portfolio was passed to Ms Faragher , who said she had the benefit of further discussions with the Town.

Mr Day’s version of the controversial proposal included split coding to enable multi-dwellings up to R30 within 400m of local centres, allowance of two dwellings on corner blocks 900sq m or above in City Beach and Floreat, and Cambridge Street lots to be split-coded R40/R60 to allow for multiple dwellings.

The changes were to be advertised to the public this week.

“(Ms Faragher) has had the responsibility for dealing with Amendment 31 over the last six months and the benefit of further discussions, including with the Town of Cambridge,’ Mr Day said.

“I have full confidence in the decision she has made with all of the advice available to her.”

Ms Faragher announced her decision yesterday after meeting with Town representatives on August 11 and receiving further advice from the Planning Department.

“I have decided against progressing with Amendment 31 in its current form as the eventual outcome is unlikely to be one that would be supported,” she said.

Mayor Keri Shannon said Ms Faragher’s decision would have been “a relief for many” and met with the popping of champagne corks.

However, not everyone supported Ms Faragher’s decision.

Shelter WA spokesman Stephen Hall issued a statement saying the decision was “diametrically opposed to the planning principles already adopted by the WA Government in Directions 2031 and the State Planning Strategy”.

“The State Government has set diversity and infill targets for each local government, which this scheme amendment by the Town of Cambridge seeks to address,” he said.

“The proposed scheme amendment promotes infill and diversity at an appropriate level in Cambridge.

“The failure to approve this scheme amendment perpetuates the NIMBY (Not in my backyard) mentality that has plagued WA planning system for many years.”

Mr Day and Ms Faragher encouraged the Town to progress with planning changes that would allow for more housing diversity.

It is understood the Town has already engaged consultants to commence a strategy that would address the aims of the amendment in a different way.