Melbourne RGZ site

Just want to get feedback regarding RGZ site for 4-6 townhouses. Are people able to find RGZ sites with development profit of minimum 20% after all costs incl GST considering today's end value?

I had chat with some developers and buyers agents - got mixed feedback. Most are saying generally, its not possible to find 20% plus profit but some are also saying that they are able to find.

Whats your opinion/experience ?

Also, one of BA told me that generally RGZ sites arw more profitable compared to GRZ. Is that the case ?

 

RGZ is more flexible, less constrained that GRZ (be VERY wart of GRZ schedule 2 - VERY restrictive). It will come back to the particular site and location

 

Yes, i agree that ultimately it will depend on individual site. But i m after general observation. Lets say one does development in RGZ site for 4 townhouses. How does it fare with development of GRZ site in same area? I guess construnction cost will be marginally higher per townhouse due to bigger size townhouse in GRZ compared to RGZ as it will allow more townhouses. Having said that, one would have paid less for GRZ size compared to RGZ site in same area. Net effect is that RGZ site's profatibility will be more as one can put more townhouses even after considering higher site purchase cost compared to GRZ.

 

We work all over the state and deal with many different Councils. There's an underlying theme/attitude - RGZ is easier and has more flexibility - an "intended outcome" for increased density...that always helps
I suspect you are trying to be too precise with generalities... so many variables...

 

Thanks, Tufan Chakir. Yes, u r right. So many variabkes.

 

I think one of the biggest hurdles at the moment is whether developers can source finance for anything over 4 units/town homes…..

 

you are mentioning grz and particular schedule 2, my understanding is that schedule 2 is better then schedule 1 as it allows 60% building coverage compared to 50% from building coverage. is there a grz without a schedule applied to it?

 

GRZ - general residential zone
RGZ - residential growth zone
Check the specificities schedules and zone applicable to a particular site
You might want to find the perfect combination of zone/land area/location, but it all depends on what is on the market....

 

How many townhouses are you allowed to build on GRZ with the land size of about 530sqm?

 

Rule of thumb 1 per 250/300sqm, but it depends on MANY factors - setback of adjoining houses, easements, topography, size of proposed houses, width and depth of block....

 

is this a reply to my question to you? as i cannot see it answered :s

 

It is all site specific. Whilst there are general provisions that apply, each site will have a different outcome/opportunity....

 

Just to add my 2 cents, the specific residential zoning is usually not the limiting factor when looking at these relatively small townhouse developments. I'm personally developing 3 townhouses on a 580m2 site that's zoned NRZ, the most restrictive and "anti-development". The reality is that many middle ring Councils in Melbourne applied the NRZ too liberally across their municipality, despite the government's strategic push to accommodate more density within middle ring suburbs. The biggest considerations in doing new site due diligence are: review of s32 for any covenants or easements, site orientation, site location, corner block vs battle-axe, location of adjoining habitable windows and general ResCode assessment. Property development isn't a simplistic process of "buy in RGZ vs GRZ = higher profit". It just doesn't work like that, you need to be detailed oriented. Hope that helps.

 

I wouldn't be game to buy NRz sites with the hope of developing it, you could risk getting stuck with a bad town planner and really have no leg to stand on due to the zoning?