DA Approved sites

[Feradd]

What are peoples opinions on purchasing sites with DA approvals to construct townhouses or units? This would be purchased with the intention of building as per the DA.

Some concerns I would have is why is the vendor selling? There are however plenty of people out there who obtain DA's without any intention of building themselves.
Another concern is if the plans don't suit the demographics of the area or rooms are too small etc however this can be overcome via several phone calls to local agents.
There may also be issues such as connections to sewerage or stormwater runoff. These also could be overcome by talking to the architect and the civil engineer.
Are there any other potential issues to look out for relating directly to a DA approval? Does anyone have any recommendations of town planners in Brisbane who are able to assess the feasibility of a DA as part of their services?

Cheers

 

[wylie]

I'd get in touch with Darryl, RPI on this forum. I think he could be your man.

 

[Jake Milne]

People often purchase properties, obtain planning permits and sell to developers for a premium to take the "paper gain".

It's a relatively low risk development strategy as it doesn't leave the vendor open to headaches caused in construction.

The points you make are valid though. It pays to review the plans and contract carefully and work out if the numbers and designs work. Most of the developers I work with aim for a 28% - 31% paper margin and realise about 15% - 18% profit upon completion.

I'd love to be able to help you with QLD connections but it's out of area for me...

 

[Kamak]

I've sold a place with DA. My circumstances were that I had left the state so no longer wanted to build as one of the dwellings was going to be a PPOR. To get the DA I had to solve most of the issues you raised around connecting to services etc.

 

[Ideo]

I prefer to sell with DA. Particularly approvals that push the envelopes and do things that other people may not be able to do.

I don't like the construction risk personally. If you can carry the holding costs while getting approval, and the approved development is appropriate for an in-demand area it is a lot lower risk IMO.

 

[Feradd]

Thanks for the replies. I would prefer to buy a site pre DA approved however I'm finding these deals really hard to come by. You need to be on the agents short list and have an ability to act fast. I could easily see 6 months pass by with no progress. Alternatively with a DA site you can have the ball rolling straight away.
I acknowledge the risks of taking on the construction which is why I'm trying to identify the risks and minimize them as much as possible beforehand. I guess the biggest unknown is what you cant see, i.e the results of the soil test. At the end of the day you will never know if you never do. I would be interested if anyone on here has purchased a DA approved site(s) and turned the development into a success.

 

[Shahin_Afarin]

If you are looking to get DA in Sydney then be very careful. Some councils are a sinch to deal with (namely Holroyd, Parramatta, Penrith) and some you just want to give yourself a frontal lobotomy (namely Kuring gai, Sydney City).

Also consider DA's at State level and DA's as council levels. i.e. if it doesn't fit council policy then it may fit State policy.

Also grab yourself a decent town planner.

 

[Ideo]

Thanks for the replies. I would prefer to buy a site pre DA approved however I'm finding these deals really hard to come by. You need to be on the agents short list and have an ability to act fast. I could easily see 6 months pass by with no progress. Alternatively with a DA site you can have the ball rolling straight away.
I acknowledge the risks of taking on the construction which is why I'm trying to identify the risks and minimize them as much as possible beforehand. I guess the biggest unknown is what you cant see, i.e the results of the soil test. At the end of the day you will never know if you never do. I would be interested if anyone on here has purchased a DA approved site(s) and turned the development into a success.

My other concern with buying DA approved properties is you may be bidding against builders/developers with their own teams who are able to construct at a much lower rate than you or me. So, they can bid higher if needs be and still make a profit.

 

[Aaron_C]

My other concern with buying DA approved properties is you may be bidding against builders/developers with their own teams who are able to construct at a much lower rate than you or me. So, they can bid higher if needs be and still make a profit.

When you see that happening that's when you know the market is just rubbish to buy in.

 

[Ideo]

When you see that happening that's when you know the market is just rubbish to buy in.

True. There was a thread on here a couple of months back on the topic.

Western Sydney, of course.

The boat has sailed on that. Unless you own a nice big block already and do a decent subdivision (working on a 6 lot at the mo) the chances of making much money on a recent purchase are getting slimmer and slimmer.

 

[Feradd]

Western Sydney, of course.

The boat has sailed on that. Unless you own a nice big block already and do a decent subdivision (working on a 6 lot at the mo) the chances of making much money on a recent purchase are getting slimmer and slimmer.

I've spent a few months this year looking over the western Sydney market for development sites and could see all the builders driving the prices way too high. This is why I'm now looking in Brisbane where the numbers work much better with much less buyer competition.

 

[Kamak]

If getting a DA dont be surprised if you end up having to appeal the council decision through VCAT or similar...

 

[Feradd]

If getting a DA dont be surprised if you end up having to appeal the council decision through VCAT or similar...

Hi Kamak,

If you are using an architect with experience in the local area shouldn't you know what is and isn't allowed before you submit the application to the council? Unless of course you are testing the council's planning codes which I would not be keen to do at my level of experience. I also want the council process to be as quick and smooth as possible as they have a reputation for being slow even without challenging the planning codes.

 

[Kamak]

Hi Kamak,

If you are using an architect with experience in the local area shouldn't you know what is and isn't allowed before you submit the application to the council? Unless of course you are testing the council's planning codes which I would not be keen to do at my level of experience. I also want the council process to be as quick and smooth as possible as they have a reputation for being slow even without challenging the planning codes.

Haha you would think that. Long story short. Plans complied, one neighbor agitated as they were quite contemporary, planning dept assessed they complied but then ended up being voted on by council, who knocked it back. Appealed at VCAT and won. In Bendigo.

 

[Piston Broke]

Thanks for the replies. I would prefer to buy a site pre DA approved however I'm finding these deals really hard to come by. You need to be on the agents short list and have an ability to act fast. I could easily see 6 months pass by with no progress. Alternatively with a DA site you can have the ball rolling straight away.
I acknowledge the risks of taking on the construction which is why I'm trying to identify the risks and minimize them as much as possible beforehand. I guess the biggest unknown is what you cant see, i.e the results of the soil test. At the end of the day you will never know if you never do. I would be interested if anyone on here has purchased a DA approved site(s) and turned the development into a success.

It's all long slow and costly process.
Plenty people will take a gain on the DA and not go through with the rest.
I know I would and have negotiated,
but unlike the posts above, a builder/developers will NOT pay premium for sites. They always have offered the least amount.
The small time builder/investor/noob will.

The real trouble is most small site owners put way too much premium on the DA so I have rarely seen one worthwhile and never purchased any.
But i have seen a few people take what seemed plain properties and first and make some good $$ out in the southwest last few years.
Some purchased at asking prices.
Properties that were advertised to all, no short lists.

They were not noobs or first timers, but still it always opens my eyes to never ending opportunities out there.