Confidence slow to build over small rural lots

CRANKING open the window of opportunity for planning applications for development of houses on vacant small rural lots in the Farming Zone following the Planning Minister’s Amendment C51 to South Gippsland Shire’s Planning Scheme has been problematic for land vendors, prospective purchasers and local real estate agents.

All three Real Estate agencies in Foster confirm that inquiry levels have definitely risen for lifestyle and hobby farm properties as people became aware of the ban on applications being lifted.

However the complexity of the current planning controls has so far dampened much of the interest from converting into significant sales.

Steve Paragreen of Paragreen Real Estate, Marion Hannon and Wendy Wright of PBE and Andrea Adams of SEJ agree that there are no easy or optimistic answers that estate agents can give to purchasers and vendors.

Andrea explained, “Suburban people with no agricultural background come in with warm and fuzzy feelings about living in the country and they simply have no idea of what is involved.

“The complexity, potential costs and time delays affect their confidence and if they have the choice, they’ll go somewhere else outside of the Shire.”

Marion reported that a few sales of both vacant small lifestyle lots and hobby farms have fallen through because prospective buyers are not willing to go through the time, cost, effort and anxiety of the current planning application situation.

The agents’ perceptions are borne out by the Council’s own experience, with only two applications so far being lodged for development of a house on land in the 8-40 hectare range and 11 applications for dwellings in the Farming Zone on lots less than 8 hectares since Amendment C51’s approval on April 29, even though property owners were clamouring for the previous year against the Minister’s temporary ban on permits.

Council is not surprised at the slow rate of applications for the 8-40 hectare lots.

Acting Manager Planning Paul Stampton observed that the information required for planning applications about ‘agricultural dwellings’ “is such that an applicant would likely spend more time considering and preparing an application than for other types of lots such as for rural-residential dwellings.”

Although there is a higher level of confidence in what would be acceptable for development of the very small lots, the agents confirm that lack of knowledge about vital information such as tenement and lot creation history is still a problem.

On top of this, other planning complications affecting small rural properties such as wildfire and coastal overlays, coupled with customer nervousness about the extra cost and risk of building near bush, is proving a hurdle to sales.

COMPLEXITY

While small lot sale inquiries are rising without sales noticeably increasing, the amount of time estate agents need to spend with each inquiry has increased from around 15 minutes to 60 minutes as they need to explain the situation to clients and hand out the Council’s rural planning fact sheets.

Steve confirmed that the complexity of what will be favourably received in terms of agricultural justification for development of a house on a lot between eight and 40 hectares and the understanding of what is involved for a whole farm, is too much for many prospective purchasers.

“We’re aware that simply grazing sheep or cattle will not commonly be considered sufficient justification for a house, which is a problem for many potential purchasers as they are interested in using their property for grazing agistment.

“At this stage we don’t know what sort of alternative, possibly intensive farming will be acceptable, and real farmers don’t want to buy the small steep blocks,” he said.

Like the agencies, the number and complexity of inquiries to Council about the small rural lots have significantly increased too.

Mr. Stampton advised, “C51 can be a complex set of provisions to read, and as such inquiries tend to be longer than normal.

“Planning officers often currently spend up to an hour with a single inquiry to ensure that the customer leaves with a good understanding of how their land is affected by the new planning controls and their options for development.

“Many of the inquirers do not know if the tenement constraint (multi-lot ownership at a set point in time) applies or not, or how their title was created, so officers need to spend time checking those details too.”

With the Planning Manager acknowledging the complexity of the issue, it is hardly surprising that the agents feel caught between their ethical obligations to explain the development situation to inquirers, and the feeling that they lack the expertise to safely interpret the confusing maze of the planning controls for their customer’s benefit.

They all urge clients to contact Council’s Planning Department (and sometimes private planning consultants such as Beveridge Williams) for verification, and find that the main response customers bring back is that “each application will be treated on a case by case basis and there are no guarantees of getting a permit to build.”

However customers are also reporting a mix of experiences and advice after contacting the Shire, which they also find unsettling.

Council sees the situation more optimistically.

“There seems to be a level of recognition on both sides of the argument that C51 is better than the situation we were in of having no rural planning powers at all,” Mr. Stampton said.

“The point was made at the recent C51 public meeting that everyone generally agrees that protection of rural landscapes and farmland is important, but at the same time understandably, many people still wish to develop their own land.

“For Council, it is a matter of trying to strike the right balance between these two sometimes competing interests.”

POSITIVE MOVE FOR VENDORS

Wendy and Andrea are strongly encouraging vendors of the very small rural lots to apply for planning permits on the grounds that their lot can be sold with confidence and the purchaser can then apply to have the house plans amended by Council to suit their individual taste.

While acknowledging that this involves time, cost and effort on the vendor’s behalf, which not everyone is in a position to commit, it can be likened to a vendor of an urban property painting the house and improving the garden to enhance the appeal and sale price of their property.

“It also means you don’t have to include a 120-day period on the contract of sale to allow the purchaser time to get a planning permit, Andrea pointed out.

Another advantage of obtaining a permit ahead of sale is the reminder from Mr. Stampton that “The smaller lots are also affected by the ‘sunset clause’ of 31 December 2011, so there is a greater imperative for those landowners to submit their applications.”

GOOD SALES WITH HOUSES

Rural lifestyle properties with existing homes are selling very well because they are in short supply and livability is guaranteed.

“People are currently more prepared to compromise on what they accept and what they may have to do – for example renovations or extensions – to get the property up to meeting their needs,” Andrea said.

“Even though June and July traditionally see fewer contracts exchanged, there are always a lot of people looking who tend to make their move to purchase in late winter or early spring.

“If your property is not available to be viewed, it can miss that market surge and also then has to compete in a relative glut market in spring when owners believe it is a good time to sell because the weather is better and gardens are flowering.”

She added, “Sales are much better this year than last year; we have already sold more in property value to date this year than we did for all of last year put together.”

Wendy Wright of PBE also supports winter being a good time to put a property on the market despite the misconception that purchasers are not around.

“Our overall sales are strong,” she said.

Comments are closed.