Recovering capital city presents opportunity for investors

Finding success in this market could be due to state government policy, according to Craig Gemmill, managing director of Gemmill Houses.

Mr Gemmill said the establishment of state government’s policy Directions 2031 allowed for new town planning schemes in local councils and rezoned areas.

“Any suburb that potentially is close to shopping centres, rail lines, transport, existing infrastructure, they’ve been supporting an increase in density,” Mr Gemmill said.

“We have what we call the R-Codes here. So you go from an R-20, which is one home on 500 square metres, and they increased the density to R-40, which is two homes on 500 square metres. That’s been a big driver.”

Suburbs that benefited from the R-Code system can be found north of the Swan River, Mr Gemmill said, which includes Joondalup, Padbury, Craigie, Kingsley and Hillarys.

In particular, these areas are able to support what Mr Gemmill claimed to be the economically wise decision of the creation of a “truplex”, or a block of three by two houses with a double garage on a 750 square metre block.

“That seems to be the most cost-effective in terms of building and then renting out and managing,” he said.

“We seem to feel if we get bigger than that, then the cost versus the return isn’t as good.”

Meanwhile, to the south of the Swan River, investors can find more aging suburbs, containing houses that are about 30 to 35 years old.

The key to these suburbs, Mr Gemmill said, lies in the land value.

“They’re (property owners) buying them and knocking them over and putting a brand new home on there,” he said.