Mortgage broker Glendalough

Small units, villas and what a valuer makes of them

Much of Glendalough's housing is unit and villa stock built from the 1960s onwards. Two and three storey walk-ups, groups of villas behind a shared driveway, and very little of it sitting on green title.

The title question comes first. A unit or villa is usually strata or survey strata, so a lender is advancing against your lot and your share of the common property rather than against a block of land you own outright.

Size comes second, and it is what catches people out on the smaller units and studios. Many lenders set a minimum internal living area, commonly measured without the balcony, the courtyard or the car bay, and a unit under that line either needs a larger deposit or a different lender.

• Internal living area, measured excluding the balcony, courtyard and car bay
• Whether the title is strata, survey strata or green title
• Strata levies, which count as a commitment against your borrowing power
• How many loans the lender already holds inside the same complex
• The proportion of the complex rented out rather than owner-occupied

Where a property sits inside the suburb matters more here than in most places. A valuer will note a unit backing onto the freeway or the rail reserve, and comparable sales through the streets built as State Housing can pull a valuation under what a well-presented unit feels like it is worth.

Infill and grouped dwellings on higher density zoning

The City of Stirling has zoned a good deal of Glendalough for more density than the original housing ever used. That is why so many ordinary blocks have come down and gone back up as two, three or four grouped dwellings.

Being a short walk from a station is much of the reason. Land near Glendalough station attracts development interest that the same block a few kilometres further out simply would not.

1. 1

   Confirm what the zoning actually allows

   The R-code, the lot size and the frontage decide how many dwellings are possible, and the answer is often fewer than the map suggests. Get it settled before the plans are drawn.

2. 2

   Value the land as it stands today

   The equity in the existing property is what funds the deposit and the early stages. A lender wants a current valuation, not the figure from your last refinance.

3. 3

   Know where construction ends and development begins

   Keeping the house and building one behind it is usually a construction loan. Past two dwellings most lenders reassess the file as development finance, with more deposit and a narrower panel.

4. 4

   Budget the items outside the build contract

   Survey and subdivision fees, demolition, service headworks, contributions and the holding costs while the site earns nothing. These are the items that turn a workable feasibility into a marginal one.

Untitled rear lots are worth raising early. Where the new lot has no title yet, only part of the panel will value it, and that one fact usually decides where the file goes.

What Glendalough clients come to us for

The work here skews younger and smaller than in the suburbs either side. First home buyers after something they can afford a few stops from the city, and investors buying one unit rather than a portfolio.

For a first home buyer the constraint is rarely the deposit on its own. It is finding a lender comfortable with an older unit at the deposit you actually have, because the lenders happiest with a small deposit are often the strictest on unit size and complex exposure.

Investors meet the other half of the same problem. Rent is assessed on the signed lease rather than an agent's estimate, and the strata levies come off your borrowing power before that rent is added back to it.

• Home loans for first home buyers buying a Glendalough unit or villa
• Lender selection where a small unit sits under a minimum internal size rule
• Investment lending on units near the station, assessed on the signed lease
• Construction finance to keep the existing house and build behind it
• Development finance for grouped dwellings on a higher density block
• Refinancing for owners who bought here before the infill started

The office is on Cambridge Street in West Leederville, a few minutes south of Glendalough. Plenty of these files never need a meeting at all, but it is there if you would rather sit down with someone.