For years, many Perth property investors have looked at large suburban blocks and seen untapped potential. The challenge was that planning rules often made that potential difficult, expensive or simply impossible to realise.
That could soon change.
The WA Government has announced a series of proposed reforms to the state’s Residential Design Codes (R-Codes) that, if implemented as proposed, could create significant opportunities for property owners and investors across Perth and regional Western Australia. The reforms are currently expected to go out for public consultation later this year, with implementation targeted for mid-2027.
While much of the discussion has focused on planning reform and housing supply, investors should be paying close attention. These changes have the potential to increase development opportunities, create new income streams and unlock value in properties that may previously have been overlooked.
One of the most significant proposals is the removal of the average lot size requirement for land coded R20 and below. Under the proposed reforms, residential property owners with blocks as small as 700 square metres may be able to subdivide, down from the current requirement of 900sqm.
For many investors, this could be a game changer.
Across Perth, there are thousands of homes sitting on blocks between 700 and 900sqm. Under the current rules, many of these properties have limited development potential. If the reforms proceed, a much larger pool of properties could become subdivision candidates, creating opportunities to develop, retain, sell or build additional dwellings.
Importantly, this isn’t just relevant for developers. Everyday investors who own established homes in well-located suburbs may suddenly find themselves holding assets with greater long-term value-add potential than previously anticipated.
That potential becomes even more important in the context of recent Federal Government tax changes.
With negative gearing incentives for adding to the housing supply, investors may increasingly focus on strategies that create value through development, subdivision and additional dwelling creation rather than relying solely on capital growth.
The proposed reforms also include removing minimum parking requirements for apartments and granny flats. While this may sound like a minor planning change, it could significantly reduce development costs and improve project feasibility for investors looking to add secondary dwellings or increase density on existing sites.
For investors, granny flats have already become an increasingly popular strategy for boosting rental income. Reducing parking requirements could make these projects faster, simpler and more cost-effective, helping improve cash flow and overall returns.
Another proposal under consideration is increasing allowable building heights in R40 areas from two storeys to three. This type of “gentle density” reform has the potential to create additional redevelopment opportunities in established middle-ring suburbs where land is becoming increasingly scarce.
Investors who understand zoning and development potential have always had an advantage over those who focus solely on the number of bedrooms and bathrooms. A property’s future development potential could become one of the most important considerations when assessing investment opportunities.
The Government is also proposing measures to streamline planning approvals and reduce unnecessary red tape. This includes reducing approval timeframes for single homes from 60 days to 30 days and removing planning approval requirements for some simple residential projects such as renovations, patios and carports.
While these changes may not attract the same attention as subdivision reforms, they can have a meaningful impact on project costs and timelines. Every month saved in approvals can reduce holding costs and improve project viability.
These reforms signal a broader shift in the way housing is likely to be delivered in Western Australia over the coming decades.
As population growth continues and housing affordability remains a challenge, governments are increasingly looking for ways to encourage infill development and make better use of existing urban land. Property owners with sites capable of accommodating additional dwellings may be well placed to benefit from this trend.
Of course, it is important to remember that these reforms remain proposed changes. The full draft package is expected to be released for public consultation later this year and the final details may differ from what has been announced to date.
However, investors should start paying attention now as the biggest opportunities in property often emerge before the broader market fully appreciates the implications of a policy change. While others focus on interest rates and headlines, savvy investors may start asking if their property, or their next property purchase, have hidden development potential that these reforms could unlock?
If you’re sitting on a 700sqm block, give us a call to see what that could mean for your property portfolio.
This article contains general information only and should not be considered financial or tax advice. The suitability of any property strategy depends on your personal circumstances, objectives and financial position. Professional advice should be sought before making investment decisions.