3 townhouse development in Melbourne

I have just tendered and appointed a builder for my mid-spec townhouse development in Melbourne. They are similar to what you're looking to build (3 x 3BR, 2BA). The cost to construct came in basically bang on the Rawlinsons 2021 $/m2 guide for this type of development (i.e. $1,950 - $2,200/m2 inc GST). My view is that $1,800/m2 is too low. There have been shortages of timber and other building products that are driving up construction prices.

 

how many sqm roughly are your townhouses? 3bed/2bath can range quite a bit.

 

Smallest is 152m2, largest is 182m2.

 

Hi Tufan Appreciate it a lot if you could PM me the details of your estimator as well. Thanks!

 

Thanks Nimai for your figures. Long time reader, first time poster and first time developer so am really here to learn. Apologies if the following question sounds silly. I have always wondered about the feasibility of development projects where on the one hand lenders will ask for 20% profit but on the other hand site costs along with construction costs rise day by day.

I acquired a site last year at a similar cost (both land are of similar size) to another development project down the street except mines is on a corner and have got a house in livable condition so I am treating it as an investment by itself for now.

I am starting the DA/town planning process at the moment but looking past that I am always unsure how to finish the project in a profitable way, let alone 20%.

Looking around in recent auctions and sold records of 2-4 unit development sites and also running feasibility calcs on those data along with construction costs at about $2k/sqm as suggested by Nimai also indicates none of these purchasers would make any substantial profit, quite a few would be making a loss.

It puzzles me as to why so many experienced (as they appear to me) builders and professionals are bidding at auctions at those costs or purchasing privately at those costs. Am I missing a few important pieces in my feaso calcs?

Looking forward to all your responses, cheers.

 

Hi Tufan, I would like to get the contact of the estimator too. May you please PM. Thank you.

 

I used Bluelevel Estimating if anyone wants to know. They are in Preston

 

Thanks for sharing their details. It seems, after your reference, everyone wanted their details. It helps

 

HI Mate I was wondering if I can your estimator conatct details too -

 

look at the two previous posts

 

What size block do you have? I'm trying to work out if i can put 3 townhouses on a corner block which is roughly 47 x 17

 

Depends on a huge number of factors, but block size seems ok. Why not try to get some quality advice from a town planner, architect or development consultant? An investment of under $1,000 isn't much to secure solid advice!

 

Thank you for the reply and will do