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Out With the old, in with the new - Sunday Times Real Estate 12/7/09

A builder Wilson & Hart says people building home should consider established coastal suburbs in the northern metropolitan area.

Managing Director Anthony Kinder said many older northern coastal suburbs were now prime redevelopment suburbs.

The former president of the Housing Industry Association in WA, said that there was now a cluster of older suburbs in the northern coastal area where houses were now more than 30 years old.

“One of the fundamentals is real estate is that land appreciates in value and buildings depreciate in value , " he said.

“The reality is that original homes in a variety of older coastal suburbs such as Duncraig, Greenwood, Warwick and Hamersley can now be purchased at around land value because the structure of the homes have nearly fully depreciated .

“For a budget of between $400,000 to $500,000, you can secure an older style home in these near coastal suburbs which are less than 20 kilometres from the city centre.

“These older - style properties can represent better long - term value than land sites for second and third home buyers which can priced at above $500,000 in more northernly coastal locations.

“One of the major attractions of demolishing and building a new home in these more established suburbs is that the average size of the lots are more than 700sqm " .

Mr Kinder said older homes were often near well-established infrastructure such as schools, health services and shopping.

“Another attraction of purchasing an older style house, is that the buyer can rent the property out and achieve a relatively high rental return while the plans and building approvals are being finalized " he said .

“This trend of demolish and build is already occurring on a small scale in these older suburbs and is expected to accelerate during the coming years as the underlying land value of these properties increase.

“These older coastal suburbs will gradually undergo a renaissance as the original families sell up and young families demolish the properties and build new homes.

“Wilson&Hart is receiving a growing number of enquiries from buyers considering demolishing an older home site as opposed to building new outer Perth suburbs. "