LAND VALUE SHINES THROUGH

In the long term, it's the value of the land on which your dwelling sits that will contribute most to growth in the value of your purchase. (big blocks are dwindling as we all know that people just don't have the time anymore to continually work on their house every weekend, people want to have fun, they work hard and the weekends they want to meet their friends)

You still can affect the growth potential significantly through the building decisions you make.
The owner of an older-style home on a block that allows for multi-residential development might be considering whether to sell, renovate or demolish and build a new home.  It's likely that in this situation the most profitable option would be either to redevelop the property into a triplex or sell to a developer looking to do that.
The other option, to renovate the existing home, might be a sentimental option but it's probably the case that this would restrict the resale value of the property.  
However, if an owner wanted to remain in the same location either renovate or rebuild, it's probably best to consider strategies that would keep alive the redevelopment potential.
For example, if the land is zoned for strata development , the owner might subdivide the block, build on one lot and sell the other, or perhaps just keep it vacant for future sale.
Homeowners considering this option should make sure they understand the tax implications in particular likely capital gains and land taxes (have always said that the taxes were way too high and a burden in this Country)

For the best guide, talk to your local REIWA agent. (that would be me ha ha)

The safest strategy is to keep to a similar pattern of housing that already exists in your precinct and concentrate on achieving the best- quality construction. (Never ever do a cheap build in an expensive area)
Owners who correctly forecast a change in the style of housing in an area, from rezoning by the local authorities, can find they achieve stronger growth. (hard to pick sometimes but I have seen People earn a lot of money that have forecasted it right)
Metropolitan Perth is experiencing reasonable population growth and there is demand for more affordable, strata-titled dwellings close to the city and communal infrastructure.
The challenge is to meet this demand through increased density that complements the area and integrates with amenities.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !! 

(Article supplied by REIWA 14/2/2015)