Property value after subdivision?



How much should I pay for the development site is a question on many developers mind who may be doing a small three-unit subdivision or a dual occupancy where the existing house is retained.


The first step is to work out how many units can be built or get Council approval and the size of each unit. We can help you here.


Then let's take a hypothetical 850 sqm Property in a local Council where the land is burdened by a schedule to the zone which requires very large open spaces and an overlay which requires vegetation to be preserved as well as 2 new canopy trees to be planted.


The property has several native trees over 5m in height which must be retained and new buildings to encroach a maximum 10% into the TPZ of these trees which requires an arborist's input. These council requirements “eat” into the developable portion of the land.


The 13.5m  front boundary faces north which is not ideal.


The developer's objective is to demolish the existing house, which is in poor order and see how many units can be built.


Experience shows three units will be the maximum number which will garner this council's support for this wedge-shaped land in a court bowl.


Each unit will be around 150sqm containing 3 bedrooms.  Ask us how many units can we fit on your land.


Recent sales in area show 3 bedroom units sold for $510,000. We are cautious so do our feasibility on a $480,000 selling price for each unit even though the front unit might command a slightly higher price.


Gross Income from the sale of 3 units


$ 1,440,000


Development cost


20% developer's margin                $180,000

Selling/legal fees say                     $45,000

Building and soft cost                    $630,000

Subdivision cost                              $45,000

Others costs, say                             $30,000


Total development costs                $930,000


Cost of property with a potential 3 lot subdivision is then $510,000   ($1,440,000 less $930,000)


We have not taken into consideration any contribution to be paid to the council and holding costs.


Using this same formula you can work out how much is a dual occupancy site worth where you retain the existing house and build one new dual occupancy home in the backyard. Of course, make sure you are allowed to subdivide the land into two lots as some Victorian Councils are or have put in place minimum lot sizes!


Allow for some renovations, contribution may not apply for two lot subdivisions and you may be satisfied with a smaller development margin.


AuArchitecture Melbourne

Mail only : #223, 2/134 Pascoe Vale Road ,Moonee Ponds 3039.


M:  0448 170 132 call me direct -7 days  from 9am to 7pm for the best advice on dual occupancy subdivision, custom home design, commercial projects  or town planning matters. 



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AuArchitecture will gladly donate  design and planning services  to charitable organisations worldwide. 

We would love to serve you through smart and beautiful  designs for your dream house, dual occupancy, townhouse or apartment projects or commercial and industrial buildings which makes  a difference.

I recall doing a

  • large multi unit  residential design with a sky-street on the fifth level for the kids to play in safety while  creating  a real sense of community living and  

  • a modular home design which grew with the family budget rather like a series of plug in components and 

  • the windmill house with views where each stair landing led to a different view and function and

  • right down to designing and obtaining planning permits for practical traditional designs to meet the family  or developer's budget and objectives.

Our Founder has  worked on hundreds of development sites for dual occupancy and townhouses. He worked on commercial, health, education, retail and leisure projects to name a few other disciplines.

Our professional designs are flexible to suit your vision and realistic to meet your budget.

We advise you must seek legal and financial advice prior to making a commitment on any property development venture. The opinions we provide are general in nature.