Ok thanks for your replies - It is in St Albans VIC - The council seems very keen to get some apartments approved in the area as it is part of their development plans for the area - I have since spoken to some other agents and they have showed me a couple that recently sold as approved 4 level apartment blocks but none have been built yet - so at least I have an idea now - Will start the process in terms of if it will be financially worthwhile and stick to two bedders as the rule of thumb as they seem to sell quickly ( even though they are older 2 bedders ).
Thanks again-
If it were me, I would be very wary of being a pioneer. I haven't been to the western suburbs of Melbourne for a couple of years however, what council wants there and what the demographic demand will be are two very different things.
I could be wrong, however I could envisage demand for such new product to be available in say, Sunshine around the train hub and shopping centre and obviously closer in to the city in the inner west suburbs.
You may find it difficult to do a correct feasibility as there will not be any comparable product for you to use to establish your end value gross realisation and, that assumes there will be demand for new medium density product there. There will be a big difference in price between traditional second hand units/flats and brand new product. Speak to some agents and ascertain what they think and what level of finish you would need to provide. I would look at a mixture of two and one bedders.
Well done for having a site that allows the type of development you are alluding too, however if I owned it, I would continue the land bank (I am assuming there is an old house to give you some holding income) and wait for someone else to be the trailblazer.
This is not advice, merely my opinion. The biggest question to ask yourself is the demographic ready for brand new units in that suburb right now? If they are, happy days as long as your number crunching stacks up.
Good luck