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NSW - How much to build a 3 or 4 pack?

Discussion in 'Development' started by C-mac, 13th Feb, 2016.

  1. C-mac

    C-mac Well-Known Member

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    Hi folks,

    Please excuse this daft/novice question - but I'm completely new to all things development and am just starting to do light research on things (think: back-of-the-envelope rough numbers spitballing, before getting the spreadsheets, Google, and phone calls going...).

    Question is (and it is very much a 'how long is a piece of string question...): In NSW, roughly how much would i be looking at to draw up plans + fully build say 3 attached villas or townhouses on a long flat block. I.e. around 800-900sqm?

    Each would have a LUG, could be single story or 2-story (keen to hear rough costs on this - which is cheaper most of the time?)

    They'd be basic finishes only, no fancy ceasarstone bench tops, no HVAC etc.

    Then the second question becomes: how much to build FOUR instead of three?

    What I'm trying to get a feel for is the 'economies of scale' possible for a 4-pack as opposed to a 3-pack. I.e. if a 3-pack tends to cost around $250-$300K (just making that figure up as am example!), and adding a fourth unit would only add say another $50K on top due to economies of scale, I'm keen to hear any thoughts like that.

    If it helps, I'm thinking of costings for the Newcastle region.

    Also keen to hear how build costs for this type of project vary in other states too - so all thoughts and insights welcome!

    Thank you!
     
  2. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    $1500/sqm is a good budget figure to work off for a 2 storey base build
     
  3. Waldo

    Waldo Well-Known Member

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    I doubt you'd have a significant cost saving per m2 by going from 3 to 4 builds. Needs to be much bigger than that to get any cost savings.
     
  4. C-mac

    C-mac Well-Known Member

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    Thanks for the feedback folks, much appreciated :)
     
  5. Be Developer

    Be Developer Property Developer Business Member

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    @C-mac


    Allow Min $1500 per sq meter

    Single stories are always cheaper to build.

    It's not how many units you can fit in, it is what market demand is important.
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    About 3 months daily workouts at Anytime Fatness should be enough for a 6 pack, so a 3/4 pack might get you there within 2 months?

    What do they charge $100ish/month? So say $200-250 you will see results.
     
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  7. Cactus

    Cactus Well-Known Member

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    The bulk of a house cost is in the wet areas which if you build 3x13sq units vs 4x9sq units would mean more kitchens so prob a higher cost to area ratio.

    Some rule of thumbs that I use though for back of envelope are $11k/builders square ( for no smaller than 11sq inc garage) and a base spec but excluding infrastructure (driveway drainage landscape metering). For double storey add $30k.

    This is for Vic though working with smaller but still volume builders that are prepared to build your plans.
     
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  8. KenW

    KenW Member

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    Hi C-MAC

    We've just purchased a five unit site in Lake Macqaurie and during our DD we approached multiple builders.

    Most were quoting approx $1450 per sqm for mid spec villas (single story) and approx $1600 per sqm for townhouses (two stories). These prices were turnkey and included GST.

    Of course every site is generally different and prices can vary depending on the site but the above numbers are a good base to work from.
     
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  9. C-mac

    C-mac Well-Known Member

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    Thanks everyone very much for the feedback. I guess to @Be Developer 's point, building to the market demand of the area is the key point.

    In my area of consideration for instance, building 3 x 3/2/1 villas would be better than building for instance 4 x 2/1/1 villas or TH's, because this market wants more of these kind of dwelling (with small grassed courtyard), and that third bedroom and second bathroom really adds over $100pw in rent too, so it's totally worth the extra sqm costs!

    So the smarter move from the sounds of it, for the size site I am considering, would be to build single-story 3/2/1's, not two story. Whilst the benefit of 2-story would be larger courtyard sizes for each dwelling, the extra $35k for brickwork and stairwells etc. Just isn't worth it.

    Not only that, but single story widens my target market as it opens it up to two other markets: young families with tiddlers (stairwells are a put-off) and possibly downsizers who are getting towards an age where stairs are an annoyance.

    Another question: with only 3 dwellings, is it smarter to torrens title these instead of strata-title? This would make them more attractive for resale later on, no? Plus with very little common areas (what, fencing, driveways?), each owner would be responsible for their own gutters, gardens etc.

    Another question if I might: would it not be smarter considering the above, to build the villas as 'attached' instead of detached? Wouldn't this reduce costs due to shared common walls between the villas? Only problem I guess would be the middle villa which would need all windows at the front/back only, and with 3 beds and two bathrooms to fit on a single level the architect would have a tough game of tetris getting each room it's window!

    I should add that my strategy for this project would be:
    - buy site and sit on it for a year whilst I build out plans, builder, destruction of house, etc. (Would be negative geared for this year but suits me at my 'peak of career' age bracket..)
    - build the three, rent all three out for another year or two
    - either sell 2 at that point (if market cycle is favourable), or wait longer until market cycle
    - with cgt-discount entitlement available to me at this point, sell down the two with minimal cgt, and use profits to pay out remaining loan on the third dwelling, which I would retain as a income-producing asset mortgage/strata-free evermore
     
  10. C-mac

    C-mac Well-Known Member

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    Lol @Scott No Mates heaven forbid I should want to have an 8-pack haha.

    Sadly, I currently only have a 1-pack (in other words, a paunch...)
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

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    Sorry @C-mac, I have taken to reading the titles only before responding. Sometimes it's spot on, other times not quite on the mark.
     
  12. C-mac

    C-mac Well-Known Member

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    Lols all good! Maybe I can work on both my 3-pack and my 6-pack ;)
     
  13. Cactus

    Cactus Well-Known Member

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    Whilst your area may prefer 3/2/1's over 2/1/1's, at the end of the day real estate comes down to price and/or terms. If priced correctly the 2/1/1's will sell. It's possible they may move slower, but again this can be a function of price.

    My point is yield (no. Of units) always wins from a revenue perspective in an area where the land price median is significant portion of the package price.

    Therefore don't discount the idea of doing 4 townhouses without further research.
     
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  14. Leo2413

    Leo2413 Well-Known Member Premium Member

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    @Caltan Since you have started posting I have enjoyed reading your input on various topics. Great insights and analytical approach.

    Much appreciated.
     
  15. Cactus

    Cactus Well-Known Member

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    Thank you for the feedback. I have enjoyed reading your posts as well as several other posters. I'm a serial lurker of forums like this on a number of topics but for some reason felt compelled to join in here.
     
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  16. Be Developer

    Be Developer Property Developer Business Member

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    @C-mac

    Bes to focus on demand of market.

    Obviously detached dwelling are better option. However, you will have to work with architect and council requirements,etc

    Unless it's a big block and/or corner block, you are looking at starta title.
     
  17. C-mac

    C-mac Well-Known Member

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    Thanks guys for the insight!

    Be Developer, I downloaded the white paper from the site to and am reading through it. It ia definitely a big scary step going from being a buy-and-hold investor (with light cosmetic reno here and there) to small devs, a bit overwhelming at first actually.

    But with the proper research and timelines, and of course dedication, it can certainly be well worth it.