Does a DA approved increase the selling value of property?

Hi All,

My parents have a property in the Sutherland shire area with 1770 square meters.

The house itself is old and run down, requiring serious renovations or knockdown and rebuild.

I'm aware that in the Sutherland shire this type of land size is quite large and would in the eyes of a developer be seen as an opportunity to build. However, my question is would a DA approved plan increase the selling value of this property?

p.s. This is my first post

 

Yes and no.

Yes - if a DA is going to be difficult or take excessive time to achieve, is for the highest and best use and will provide a developer a jump ahead of the competition to break ground or achieves more than would otherwise be permissible on the site (eg boarding house approvals and additional density concessions)

No - if the design is wrong for the market, isn't HBU of the site, is too costly to purchase or deliver.

 

Thanks @Scott No Mates greatly appreciated!

 

What i would do is consult with a local planner (pay them for their time) and ask for suggestion on how to maximise the land. Duplex, triplex, subdivision... whatever.
Also a rough estimate on how much planning would cost.
There are so many variables and local council rules that anyting else is just speculating.

 

Welcome @Dani26

I live in the area, a few of us do.

Development potential is more than just land size.....

Location is a big one, this will also determine the zoning (if it is near a station zoning will permit higher density, if it is near a fire zone very low density) how near it is to transport, slope, rock, neighbors and other nearby buildings and development.....

I'd start with talking to an agent or two (I can refer a hastle free agent, pm me) as they will be a cost free reference as to if the site has potential for development, you could even ask what sort of product would suit if you were to obtain a DA as suggested by @Scott No Mates.

Then if you feel it is worth the effort for potential reward and you have the time and money to obtain a DA, find a local town planner as suggested by @Piston_Broke
The process will take at least 6 months, then a sales campaign, finally settlement, hope your parent's aren't is a rush....

As a suggestion, you could find a builder and do a joint venture, where your parent's end up with a new unit and some cash.

Please note, seek some tax advice as to if any of this process might affect or change your parent's tax liability, read some of @Terry_w tax tips (as currently I imagine the property is CGT free upon sale, starting to develop would likely change this).

 

Wouldnt hurt to read this thread as an example
Tax implications of converting family home to 3 townhouses

 

I have on sold DAs in Melb market
I dont know anything about Sutherland

However selling a DA is a numbers game. Your buyer will most likely be a builder, the buyer will need to be making a minimum of 20% profit. If there is no fat in it then it wont fly and no point to it

the drawings/design also very important, must be attractive and you need to find out what sells in the area. Size, configuration

First step, DD required to establish how to maximise block, all costs to build including infrastructure and estimated sale/end values

I would start with finding out the potential of the block using a townplanner. It wont take too much work to find out if its viable...you will need all costing

Local re agent will tell you what product is in demand and you can also research this, what is selling. Could also find out what builders are developing in the area and give them a call.

 

Depending if you have any experience in this area and or the time to do the due diligence around the DA, you might find that you can still get a great result by just offering developers a long settlement. That way they can do all the planning to their liking and still offer a bit of a premium price as they won’t have any holding costs until they are actually ready to build.

 

This is probably the best way to move forward. From there you can decide which way you want to market the property or proceed with extracting value.

Where is the land? I know the Shire quite well.

- Andrew