SUBDIVISION
The most common subdivision is where an existing dwelling is retained and a new title of land is created behind producing what is commonly known as a ‘Battle Axe Block’. There are also occasions in which a retain and build can be on the side of an existing house, however this is a rare occurrence as this type of subdivision traditionally can only apply to a corner site. Land owners have several choices with the approach of subdividing, some of which are -
- Subdivide the land and sell off the newly created vacant land.
- Subdivide the land and then build a new dwelling on the newly created vacant land.
- Develop a new dwelling on the newly created vacant land, and then subdivide the land after completion of the construction of the new dwelling.
Subdivision of land occurs when a parent lot is split into smaller lots. This often occurs in areas where the zoning has changed via a new Town Planning Scheme or scheme amendment. For example, the zoning may have been R20 previously and the change of zoning to R40 now allows the block to be split. Zoning varies in every suburb and also within the suburb. The zoning density generally increases as you get closer to main roads with bus routes or train stations and also in proximity to activity centres such as shopping centres.
The process for options 1 and 2 are via survey strata and option 3 is via built strata.
Whichever option you choose will be subject to several things, such as how much equity you have in the original land, how much cash you have available and also your borrowing level.
iDevelop WA has the expertise to work through the option that suits your position the best, as well as putting you in touch with the best finance people available, who understand how finance works best for you and the different subdivision options. Whilst the finance relating to subdivisions and developments is not particularly difficult, it is very important to work with finance experts who understand what each bank needs and which will work best for your financial situation. It is important to recognise that not all banks are the same and what one bank might not offer to do for you another will likely welcome your business. Too often there are stories of one bank not approving a loan and another happy to approve the same loan. Different banks have different rules for subdivision and development, so finding the right one for you is important for you to maximise your rewards for effort.
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GROUP DWELLINGS
Grouped Dwellings is the terminology used to describe dwellings that have been created from a subdivision, where there are no individual dwellings built on top of another. Grouped dwellings can be single houses that have been built behind an existing house, or villas or townhouses. A villa is a single storey dwelling, a townhouse a double storey dwelling. The common grouped dwelling format in WA is a duplex, triplex, or quadruplex. Eg 2, 3 or 4 dwellings. However, there isn’t a limit and although less common, there are developments of 10 or more throughout WA. Most commonly, a duplex will be where an existing dwelling is retained, whereas triplex or larger developments nearly always require any existing dwellings to be demolished to make way for the new development.
Developments of 5 or less dwellings do not require the engagement of a strata manager, even though all of the strata rules apply.
These developments can also be developed via survey strata or build strata, and owners financial position again dictates which option should be selected.
RETAIN & BUILD
Retain and Build is a simplistic term that refers to a subdivision or development in which an existing dwelling is retained and a new parcel of land and/or new dwelling is created. Most commonly, retain and build sites will only allow the creation of one additional lot, as these sites are traditionally lower density zoned eg R20, R25, or R30. Whilst there are exceptions to this, they are not common.
MULTIPLE DWELLINGS
Multiple Dwellings is the terminology used for apartments. The current Residential Design Codes allow, on some sites, the ability to create higher density development of apartments versus doing grouped dwellings. For example, a site that would allow 3 grouped dwellings (eg 3 villas or 3 townhouses) could facilitate 6 apartments. The common size is 6-10 apartments depending on the size and zoning of the land. Depending on the Council that controls the suburb, suitable sites that have the applicable zoning tend to be surrounding services and public transport. These types of development complexes are seen to be more ‘boutique’ by buyers and are more attractive than the larger multi storey, large apartment complexes. Whilst developing apartments can offer greater returns, there are significantly greater hurdles and criteria to meet. The cost to develop is greater and the time to complete is longer. Finance is also more difficult to obtain for apartment projects. There are greater risks with the current market having lots of supply and many of the larger developers building complexes of 40 and 50 apartments popping up regularly. The selection of a suitable sit, and the actual planning and execution of developing one of these sites requires a high level of expertise.
iDevelop WA has significant experience in these types of projects and can assist you to decide if this is for you. Should you decide to go ahead we can give you the tools and knowledge to seek the greatest outcomes possible.