NSW Need some advice for buying and subdividing in Sydney

Hi all.. I am exploring options to buy a vacant plot OR one with damaged/ old property in Sydney that we can knock down, subdivide the plot and build two smallish houses/ townhouses on it for my family members (both properties will have separate ownership), as close to CBD as possible. Total budget is flexible but less than say max $1.2M-$1.4M inclusive of house price, re-building cost and other costs involved. These will be ideally PPORs but if they are too far from CBD, then we don't mind considering them as IPs.

Due to budget constraints, I don't have a specific minimum plot size in mind though it will need to be at least above the size limits for the sub-division permission set by councils. Also, we are happy even if we can build only 2-bedroom houses for now and later add more rooms if space permits. Since both houses/ town-houses will be of my family members, there'll be more flexibility in terms of size of the houses, design, and therefore budget. I have a few queries. I will appreciate if some experience people can help!

1) As usual, the ideal suburb/spot would be with amenities, transportation and decent schools nearby. I am looking for older, established suburbs. Considering the density norms of council and going prices, which suburbs would be ideal for this price range and which kind of land sizes should we be looking for?

2) Can someone recommend BAs or developers who specialize in sourcing this type of properties who I can reach out to?

3) Should I start looking for this type of property already or wait for market to slow down further? Since there's no rush, ideally I would go for the most run down property possible to knock it down as chances of getting the vacant land plots in established suburbs are pretty bleak. Any tips for sourcing / negotiating for such properties will be appreciated.

Thanks.

 

So $1.2-$1.4 total??!! Absolute minimum $500k in subdivision and build costs making your purchase price about $700-$900k. All I can say is you’re going to be a looonnng way from the CBD!

 

Thanks, Dan! I reckon that.. which suburbs are you think can fit in? Also, suburbs far off might have low density norms, hence subdivision might not be easy?

 

I don't get the goal with this plan. Why not just buy a PPOR that you want already, or buy a lot and just build a single PPOR?

 

Hey mate, you might be able to get something in Blacktown for that price range.

As a builder I would put subdivision and build cost at 750k minimum. Duplexs are costing 750k these days.

 

Some small area Hills,, Penrith Liverpool and Campbelltown areas would squeeze into the brief.

What size the goal?

 

@Joseph33 depends on quality. If you straight up split a flat block you can build a project home for $220k. Add super basic landscaping and subdivision costs and you can get away with it for well under that. Doing one at long jetty at the moment with hotondo.

 

Thanks dan, I think the op was talking about sub dividing and building two houses but I could be wrong.

Mate I would suggest that Sydney is overly priced compared to the central coast but like you said budget might get you over the line.
I know a lot of project home companies are charging around 300k plus and that's no landscape, driveway, retaining walls, osd tanks and some don't even supply tilling.

I've actually been hearing some pretty bad stories lately from project home companies.
They tend to just do their part and you find that homeowners get screwed over in the end.

 

Well.. I and another family member want to live together.. and we are willing to compromise on size of the house, so by buying a very old house, sub-dividing and building two small houses/ town-houses, we both can probably afford to buy a small house each rather than one large size house which may have absurd price and be unaffordable for us otherwise. Strategy is as simple as that. It is mainly PPOR focused though I am not ruling out IP option until I have numbers.

 

Would suggest you wait....Sydney prices are coming off.....in another 18-24 months you should be able do within that boudget....

 

Those were my immediate thoughts too.

 

Or consider a house that has space for a granny flat. Would one of the 2 groups be happy enough living in a 60sqm home? Note it may or may not be possible to subdivide (and sell one part to the other party) though.

Reckon if you can get a corner block and have 2 street frontages, that would be good - you would completely feel like separate homes and households.

 

To be honest with the budget you set aside, you are probably unlikely to do a subdivision in Sydney, within reasonable proximity to the CBD, and build two houses for the budget you've envisioned.

When it comes to subdivision, you need to check the NSW and local council requirements for minimum lot size. I'm not an expert in Sydney market, but even places like Penrith City Council require a minimum something like 400 sqm - 450 sqm or so (don't quote me on that, but something like that). That means you will needing to find a property on 800sqm - 900sqm lot for a start - have you checked the prices in say the Penrith city council area lately? At best, it would seem to be around the $700K to $800K mark. For subdivision, there are a number of associated costs like town planning, putting in new sewer/water, infrastructure charges etc - so could be another $50K - $100K. Then it depends on the existing house, whether that is satisfactory or not, whether it needs to be knocked down or not, whether it is sited correctly so you could sub-divide and free up a lot to build another house. Then you got to build at least another house $300K - 400K plus and double that if building two! So not impossible, but probably quite a challenge and somewhat difficult to do.

(Note you will see some developments like Ropes Crossing / Jordan Springs that are offering small blocks of land like 300 sqm size. It does appear the council will allow small blocks but this under a master planned community type development, not a once off subdivision in an existing area).

You could also build a duplex depending that the zoning is correct and would allow for it, but as seen with comments above, finding the land and then building the duplex would be a challenge (although with the anticipated budget if you can find the and cheap enough would be feasible but it won't be near the CBD).

So what are the options then:
1) Buy your own home with your family and your friend will have to buy their own.
2) Find a new estate where you can find 2 lots of land side by side and each build your own home.
3) Buy and existing property and build a granny flat out the back. One party will need to be satisfied with that.
4) Buy land and build a new house with an integrated granny flat, or multi-generational type living arrangements in the house (i.e. could have 2 storys with 2 kitchens!).
5) Do what you want to do but it will be further out.
6) Move to Brisbane, Adelaide, or Perth - get your own places each and have a nice life.

 

Thanks. Whilst I am not referring to the prices, I have seen many duplexes (or townhouses - I am not sure what's difference between them) in lower North Shore area (e.g. Crows Nest, St. Leonards, Lane Cove, Chatswood, etc) on fairly small plot sizes, around 175sqm - 200sqm. Though I don't know the exact sizes and also council norms in the area, let's assume that norm for a townhouse is minimum 175sqm. So in this case, if one finds a symmetric plot of 350sqm in some cheaper suburb (not referring to North Shore here), can't it be sub-divided into 175sqm x 2 and thus two small townhouses be built on the area that will be separately owned? What could be the practical challenges in this plan? I am just curious as it looks feasible just going by the numbers.

 

It will totally depend on the particular Local Council's planning rules on what is permitted in terms of zoning and minimum lot sizes. The rules are different for each council, so best advice would be to talk to a Town Planner to get an understanding. You also need to make the distinction of having separate title vs strata title. It's possible that those townhouses are strata titled but could be on their own title if such planning and development rules were permitted for that area. It's common in the Eastern suburbs, say around Bondi Junction, where houses are built on 150 sqm lots - even so the land value for such a small lot is a $1m or so.

 

@virhlpool

For the budget you have mentioned you will be looking around Penrith area. You may want to look at some of the suburbs closer to badgery creek too.

Sydney is about as safe as it gets in terms of investment in Australia at present, we are looking at about 3 to 5% growth this year and similar next year.

 

Thanks. Don't you reckon prices of houses (along with apartments) will go down or remain stable for a few years?

 

Have some experience
Vacant land in Sydney does not exist (if its new release the developers have made it as small as possible so subdivision land is extremely rare). Only way you could vacant land is if someone demlished a house. Even then dont expect a discount from one with a run down house.

Sydney land prices are not the issues, Sydney construction costs is more of an issue. With the shortage of trades and increase in government infrastructure contracts, more than half your budget would be on construction. Also a dual occ would cost more than twice a project builder single house (theres a lot more red tape and a large amount of project builders do not even get involved - mainly the cheapies)

I would say 700-800k for build which leaves 4-600k for land/house with land

Newcastle would be the only doable place closest to Sydney

 

Thanks for your insights. How about a pre-existing single villa/ townhouse with one shared wall? That seems to be fitting in $700k-$750k range in some suburbs. It's also to be seen if their prices remain at the same levels or come down li'l bit in the next 2-3 yrs.

 

3 bedder villas are definitely possible... and you don't need to go 35km from the cbd either.

At 750-850k price range you can pick up 3 bedder villas in belfield area which is located between campsie and Strathfield (15km from cbd)