My latest development - 4 dwellings in Melbourne

Hey guys,

This is one of my newest developments which is about to commence. It’s a 4 townhouse/unit development – 2 townhouses and 2 single story units located in a decent suburb of Melbourne. As a result it will have a pretty good finish. Last week the existing house was demolished so it is vacant land now.

I bought this mid last year with an 8 month settlement and obtained the Town Planning Permit during this time :). At the moment the numbers look like this:

Land & Town Planning costs

Land: $570,000
Stamp duty/legals: $31,000
Permits, surveyor, council application fee, engineering etc: $30,000
Total Costs: $661,000


Construction

Total build: $625,000 (I'm a registered builder so my costs are naturally lower than a developer)
Subdivision (open space levy in Victoria): $28,000
Interest: $35,000
Bank app fee: $5,000
Titles & legals: $2,000
Total Construction cost: $695,000

COMBINED TOTAL (LAND & CONSTRUCTION): $1,356,000

The dwellings today would have a combined value of about $1,840,000. I’m allowing 6-7 months to build. They range from 11-18 squares and rents would be around $1,730 pw. I’ve attached images of the house during demolition and after demolition. Blocks look so much bigger when vacant!

The plumber is in next week to do the underground work, followed by the concrete guy right. :) I’ll upload images as it develops. Any questions feel free to ask.

Cheers, Oscar
 

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Hey guys,

This is one of my newest developments which is about to commence. It’s a 4 townhouse/unit development – 2 townhouses and 2 single story units located in a decent suburb of Melbourne. As a result it will have a pretty good finish. Last week the existing house was demolished so it is vacant land now.

I bought this mid last year with an 8 month settlement and obtained the Town Planning Permit during this time :). At the moment the numbers look like this:

Land & Town Planning costs

Land: $570,000
Stamp duty/legals: $31,000
Permits, surveyor, council application fee, engineering etc: $30,000
Total Costs: $661,000


Construction

Total build: $625,000
Subdivision (open space levy in Victoria): $28,000
Interest: $35,000
Bank app fee: $5,000
Titles & legals: $2,000
Total Construction cost: $695,000

COMBINED TOTAL (LAND & CONSTRUCTION): $1,356,000

The dwellings today would have a combined value of about $1,840,000. I’m allowing 6-7 months to build. They range from 11-18 squares and rents would be around $1,730 pw. I’ve attached images of the house during demolition and after demolition. Blocks look so much bigger when vacant!

The plumber is in next week to do the underground work, followed by the concrete guy right. :) I’ll upload images as it develops. Any questions feel free to ask.

Cheers, Oscar

Hi Oscar
Are you planning to sell any of these? Am curious on how the Melb market tracking

I am very keen on this market, and I like the figures.

All the best with this project, keep us posted.

MTR
 
Hi Oscar
Are you planning to sell any of these? Am curious on how the Melb market tracking

I am very keen on this market, and I like the figures.

All the best with this project, keep us posted.

MTR

Thanks. I'll probably stick to my combo of selling some and keeping some - best of both worlds.

Since the beginning of the year any decent development site in Melbourne is selling quickly and with multiple offers. Auction clearance rates have been healthy as well. It's not crazy like a few years ago, but this is a good thing as it makes buying a site a little easier. Even when i purchased this one late last year there were 3 other offers on the table.
I am also finding stock levels low on a few areas i am targeting.

How's everyone else in the Melbourne market reading it?

Oscar
 
Inner city from where I can see is going really well. There is definitely an appetite right now.


Aaron
Is inner city rising?
What about auctions, any idea on clearance rates, fortunately we rarely go to auction in Perth.
 
I'll be following this one with interest. I can't believe you got an 8mth settlement when competing with 3 other offers - well done!

I'd love to see the plans if you can email them to me.
 
Aaron
Is inner city rising?
What about auctions, any idea on clearance rates, fortunately we rarely go to auction in Perth.

Inner city doing very well. Not sure what the exact clearance rates are but people are paying extraordinary prices for properties. In Carlton the other day a double storey terrace similar to one we own sold for $1.5m. Only on 110sqm of land and no car park!
 
Inner city doing very well. Not sure what the exact clearance rates are but people are paying extraordinary prices for properties. In Carlton the other day a double storey terrace similar to one we own sold for $1.5m. Only on 110sqm of land and no car park!

:eek: that is insane. were they not around the $1-1.15m mark say 18 months ago
 
I'll be following this one with interest. I can't believe you got an 8mth settlement when competing with 3 other offers - well done!

I'd love to see the plans if you can email them to me.

It suited the vendors (elderly couple). More than suited me :D. It's just a case of asking why a vendor is selling. I renegotiated the settlement terms after an auction once. That was pretty good i thought :p

Oscar
 
It suited the vendors (elderly couple). More than suited me :D. It's just a case of asking why a vendor is selling. I renegotiated the settlement terms after an auction once. That was pretty good i thought :p

Oscar

i had one last year somewhat similar too, vendor was moving into a home but hadnt found one yet so wanted very flexible settlement terms. it meant there was a lot less competition and i got to work on plans in the meantime.
 
What's the normal wait time for plans to get approved these days? I've just submitted mine to council today.

How long is a piece of string? Can take 3 months, 6 months, 24 months. Sometimes you may never get through the process if it's not done correctly.

Oscar
 
Hi Oscar what is the bank application fee $5000 in detail?

It's a commercial loan so the application fee is based on a % of the total loan amount. If it was a 3 unit site then residential would have been an option. App fee would be nominal.

Oscar
 
i had one last year somewhat similar too, vendor was moving into a home but hadnt found one yet so wanted very flexible settlement terms. it meant there was a lot less competition and i got to work on plans in the meantime.

Nice :D

I'll be following this one with interest. I can't believe you got an 8mth settlement when competing with 3 other offers - well done!

I'd love to see the plans if you can email them to me.

Thanks Myf. I love long settlements. :)
 
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