Understanding the characteristics and idiosyncrasies of a particular suburb, and how that plays into broader market expectations and demand is critical when investing in property. Each suburb is governed by differing buyer expectations and guiding rules, meaning a dwelling type that may be attractive within inner Melbourne, may be much less so in the middle suburban ring.
Navigating the pitfalls of buying heritage property
Owning a proud piece of Victoria’s heritage can be extremely rewarding, but it does add an extra layer of consideration to purchasing decisions.
Heritage buildings are recognised as having historic or cultural significance by the government.
As such, there are certain obligations and restrictions buyers must agree to when purchasing, to ensure they preserve the structure and aesthetic appeal for the future.
It pays to know the pros and cons of owning a heritage property before buying.
Different heritage types
Firstly, check the type of heritage description the property falls under. Is it council, state, or national?
It’s important to understand the difference between heritage overlay and heritage listed property.
Many people don’t initially realise there is a differentiation.
Often my clients will mention they are interested in a property, which is heritage listed, but 99 per cent of the time the place actually falls under the heritage overlay category.
This has very different implications for prospective property owners in regards to rights and responsibilities.
Properties under heritage listing are considerably rarer and therefore the owners’ regulations are more stringent.
Heritage listed properties include structures like the Melbourne Town Hall, Melbourne CBD’s Royal Arcade, as well as Toorak House. Not exactly your typical residential dwelling.
However, they also include more modest structures, which are of particular importance to the State’s cultural heritage
These include places like 228 Domain Road, South Yarra, which is a single storey concrete brick house, designed by prominent local architect, Neil Clerehan in 1964.
Another is Walmsley House in Parkville, which is an example of the thousands of prefabricated iron and timber buildings imported to Victoria following the first gold rushes of 1851.
All in all, Victoria has a total of about 2,400 places and objects that are significant to the State’s history and on the heritage list.
Buyers must be aware of their obligations, which include informing and gaining permission from Heritage Victoria regarding any changes to the place.
Owners must be committed to maintaining their property and notify Heritage Victoria if they intend to sell.
However, it’s important to realise that just because a property is included on the register, it doesn’t guarantee that the place will never change, or prevent it from being used for a different purpose.
It’s also useful to know that owners looking to restore a heritage place, may be eligible for financial help through a grants program.
On the other hand, heritage overlay is significantly more common, and in turn the owners’ rules and regulations are less stringent.
Having said that, the regulations that do exist are important to understand and follow, because there are certainly some significant fines and ramifications if they are not.
Heritage overlay may cover just one element, such as an individual building or structure, or a number of elements, such as a group of houses or trees in a street.
So in effect, it could be over a single house, but it could also be over an entire streetscape, suburb; or even a township in regional Victoria.
Heritage overlays can pertain to issues, such as paint control, especially the front facade, ensuring it has the correct heritage colour scheme.
The heritage obligations could relate to internal alteration control; regarding the structure, size and layout of the building.
Additionally, the heritage overlay may pertain to tree and garden controls, to ensure a consistent streetscape.
Purchasing considerations: heritage listed property
Given the high level of restrictions and obligations for heritage listed dwellings, it’s important that prospective purchasers are passionate about period homes generally, and the property itself more specifically.
If the property is likely to need work at some stage, it’s important to ensure you have the financial capacity and ability to carry out the obligated upgrades, in keeping with the original era.
Attaining or having purpose built fixtures and fittings for renovating a home of heritage listing can be expensive, and complying with heritage requirements, arduous.
You’re unlikely to be able to head down to the local hardware store and pick up generic fittings.
You’ll need to conduct the necessary research and then spend time with Heritage Victoria consultants to make sure the materials comply.
Crucial, but sometimes overlooked, is the importance of ascertaining whether works carried out by previous owners have complied with Heritage Victoria's requirements.
If they aren’t up to standard and need fixing, the onus may fall back on you as the new owner.
As with all property purchases, but particularly heritage homes, a building and pest inspection is essential.
Another issue which is sometimes overlooked is checking finance restrictions, particularly with heritage listed properties.
A lender may have extra criteria relating to the property or the loan-to-value ratio may be reduced.
Insurance premiums are another consideration, as they may be greater on a heritage listed property.
Purchasing considerations: heritage overlay property
As mentioned, heritage overlay properties are far more common and the restrictions and obligations less stringent.
A lot of properties, particularly in inner-city Melbourne, are subject to some form of heritage overlay.
When looking to purchase, it’s prudent to ascertain whether the heritage obligations relate to the property itself or the general area.
If generic for the area, look at the neighboring properties to gain insight into the nature of the extensions and modifications that are possible.
It’s also important to understand a council's preference for extensions and renovations of homes within the overlay, as they do differ depending on location and jurisdiction.
This will help you understand whether the particular heritage overlay allows you to achieve renovation and dwelling aspirations.
For example you can still build a new home under certain heritage overlays, if you keep the front facade.
This is seen quite regularly in suburbs like Albert Park and Middle Park, where the front facade of a single front-end terrace house has been retained, but the structure behind it completely rebuilt.
Take home message
The iconic and unique characteristics heritage homes can offer, often result in strong demand, and in turn can make for a fantastic long term investment.
However, as with all property decisions, purchasing a heritage home should be guided by knowledge and expertise.
Doing so, will help ensure potential pitfalls are avoided, while wealth and lifestyle factors are maximised.
For more information on heritage requirements head to: https://www.planning.vic.gov.au/policy-and-strategy/local-heritage-protection
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