Hi all, I just purchased a brick home centred on 670sqm in Melbourne. The property has been approved for 3 street-facing townhouses. Very general, I know... But what would the associated costs be if I was to knockdown and rebuild the townhouses. I appreciate the assistance. This is my first development opportunity and I'd like to get a rough overview before I proceed. Many thanks, Mark
Have you purchased this block without doing a feasibility? To get an accurate costing you might want to use an estimator to give you some advice on the costing of what is in the DA plans - try Blue Level Estimating I'm not sure if they will estimate on the other costs such as demolition, infrastructure charges, council fees, public open space levies etc etc. These are the items which can blow out feasibilities! I'm going to tag some melbourne people in case they have some local words of wisdom for you @lixas4 @Tufan Chakir
Hi Mark, Welcome to the forum. For some inspiration, go through some of the threads by @Westminster and @Sackie, they are very good at sharing their developments, and have provided detailed timelines of each step along the way, great for learning. For build costs, there have been some threads on here, you can use the search function to find them. You can also check out bmt's construction cost table, which provides a sqm build cost Cost to Build a House | Building Costs Australia There will be other costs for the subdivision which westminster mentions above, infrastructure costs are a bit of an unknown as its site dependent. If you're in melb you will likely have gas, water, elect, tele abutting your site and connecting to them should be fairly easy. Tele can sometimes be a bit more expensive if the telstra/nbn pits are on the other side of the road, so go check that, and if they are, then get into it straight away as it can be time consuming if they need to be built on your side of the road. Drainage and sewer are always the unknowns with developing, and should always be a part of any site due diligence. Within melb in 'most' cases its ok, and in new estates in melb the engineers have requirements to have drainage and sewerage connections that can service the building envelopes of the whole site, so the new estates are fine for drainage and sewerage. But the older parts of melb may not have drainage and sewerage set up for building extra lots on the site. Ie, the block could fall to the rear and not have any assets at the rear, which could have been fine when the old house was at the front of the block, but an issue when you try to maximise the site. If you have 3 street fronting townhouses you will probably be fine, but do check. As part of the subdivision there will be costs and contribution payments to the service authorities and council, rough figures will be: - sub permit and certification payment to council 1.5k - new elect pit(s) 5k - water and sewer contributions 2k (assuming non works) - gas free - tele 3k There will also be costs installing the above connections, which the builder may or may not include in their contract. The other big subdivision cost is the public open space contribution, this is required on subdivisions of 3 lots or more, and the default rate is 5% of unimproved site value (which means land value), but this rate can be changed as per the planning scheme, ask your land surveyor to check. Some parts go up much higher, for example, some parts along the mornington peninsula are 12%. As a side note, i am the surveyor for a subdivision on the peninsula for 3 lots, one existing and two proposed at the rear. The owner only wants to keep the front one, and sell a rear lot with plans for the two proposed units to a developer. This is a two lot sub, but as it could be further subdivided would normally be caught under the public open space contributions and be required to pay the contribution over the entire site. What we have done is turn the two lot sub into a staged sub, which means the public open space contribution payment is only applicable for the current stage (the existing dwelling land only), and the contribution related to land with the proposed two units can be deferred until those two proposed units are subdivided. Not sure if the op is planning on building all the townhouses or not, but keep this in mind if you aren't. Last tips would be speak to an accountant to make sure everything is set up correctly and using margin scheme if its available for you. Speak to sales agents to see if what you are building is going to be desirable and make a profit. And a finance person to see if you can get money to construct.
I am trying to get my head around the connection costs,and contributions and this is a great explanation . I still cannot put my finger on the costs when it comes to sewer,storm ,main water etc I am doing a battle axe project on an old block in Seaford Melbourne with keeping the existing house in the front and building at the back.The plans are being finalised by the architect ,in the meantime a couple of builders quoted as follows for the connection fees Storm water drainage provisional sum $14k ,service connection underground power and gas $6800.provisional sum water $3000. provisional sum sewer tie point $3900.NBN $1800.00.Another builder advised me $29k as lump sum for all connections Is the former builder's quote more accurate and does it cover all connection and contributions or is there more .Thanks
Provisional sum is an allowance - a bets guess (should be) as to what those costs will be. Higher, you pay more, lower actuals, you pay less. Normally PC items are reasonably close to what to expect. The "lump sum" option - be cautious - again the builder is estimating. Will it be a fixed fee being offered? Kind of doubt it as these sorts of costs are unknown until there's a response from servicing authorities
