The attempt to bridge the gap in medium density housing may have an unfortunate side effect of reducing the value of properties, an expert has stated.
With a need to address both an ageing and quickly growing population, there is a need for an increase of different kinds property to meet the needs of a variety of people.
Referred to as the ‘missing middle’, the Low Rise Medium Density Housing Code has attempted to solve these changing demographic needs, according to Anna Porter, valuer, property commentator and CEO of Suburbanite.
“The Low Rise Medium Density Housing Code fast tracks complying development approval for one- and two-storey dual occupancies (side-by-side), manor houses, dual occupancies (one above the other) and terraces,” explained Ms Porter.
“This means the DA’s for this style of housing are being pushed through the councils at a fast rate but some councils have opted for an extension to avoid fast-tracking.
“Deferral of the code, which fast-tracks approval to 20 days if it is compliant, has been granted to councils like Lane Cove, Northern Beaches, Liverpool and Bankstown until July 2019.”
Due to the deferral, Ms Porter has noticed blocks have been purchased in these areas in preparation of the changes before other property owners are aware and are expecting a value increase.
However, Ms Porter said this may not necessarily be the case.
“An automatic value increase because of a new planning policy isn’t a certainty and when there is a jump in supply of suitable sites this can have the opposite effect,” she said.
“We see some early adopters of the policy may be the winners, but those that wait will become one of many sites that will literally walk through the council planning process with ease and that reduces any expected uplift in values from the changing site use.”
In fact, property that fits best into the ‘missing middle’ may be likely to experience devaluation, she said.
“The policy will likely devalue development sites that match this criteria as many home owners will jump on this opportunity and push their property through as complying development and given that so many properties will now have more development opportunity that won’t be a unique feature,” Ms Porter said.
“When there is an over-supply of ‘easy to get DA’s’ this lowers the value of them in the market place and will result in devaluing of development sites across greater Sydney over the next few years as a result.”
She added downsizers would be the demographic most likely to benefit from an increase of medium density housing.
“This means the ageing population will have more housing stock to choose from when looking to downsize and their large style family homes will go to market,” she concluded.