WA property expert calls for dedicated first home buyer zones to break the home ownership deadlock

Councils should be given special powers to allow mums and dads — and other homeowners — the ability to subdivide their properties and create lots specifically for first home buyers priced out of the Great Australian Dream of home ownership. That’s the view of respected property analyst Gavin Hegney who expects Perth’s median house price will be $1 million within five years, challenging people’s ability to get into the market. With Perth’s median already at $807,000, Mr Hegney expects that to increase given expected interest rate cuts this year and Federal housing policies from both major political parties are likely to drive up demand, regardless of which side wins the election. Mr Hegney believes one way in would be through the creation of specific first home buyer lots in established suburbs, by giving those whose properties might not otherwise comply with existing subdivision rules, a “first home buyer density bonus”. This would allow allowing backyards and properties to be carved up for smaller and medium-sized lots — but they would only receive the bonus if the new lot was sold to a first-time buyer. And if a property was onsold, it would have to be to another first-time buyer. “First home buyers need to compete often with investors in order to buy the best properties. They are often in the same price bracket at $500,000 to $850,000,” he said. “But what if they didn’t? “Parents often look to assist their children to buy their first home through gifting or loaning money. “Similarly, they may do this if their property was able to be subdivided perhaps even retaining the original home and creating a new lot at the rear or the side for one of their first home buyer children to buy.” Any prospective first-home buyers “jogging” towards buying would now “need to run” given the likely added demand in the market, he said, and given governments wanted to increase density in many suburbs, a proposal like his would be more direct change. Housing Industry Association executive director Michael McGowan said property owners should be provided with concessions to create more land. “Areas like Belmont, Rivervale, Midland and Rockingham have blocks large enough that owners should be provided concessions to increase the density,” Mr McGowan said. “Such concessions would allow the owner to remain in an area they are familiar with and an opportunity for additional home buyers to enter the market. “Unfortunately, local policies that require minimum frontage or land sizes to subdivide — that don’t match the typical lot sizes or frontages of the area — deter many homeowners the opportunity to take advantage of gentle density. “Aside from local policies the costs involved, like power upgrades, can be prohibitive for infill land subdivision to homeowners.” The West Australian Local Government Association said subdivision policies were a matter for the State Government through the WA Planning Commission. “There are significant parts of Perth, and most major regional towns that allow infill development, that would allow a subdivision of a property,” a spokesperson said. “Where the proposals is compliant with State and local planning rules, they will generally receive approval.”