Sell with permits or subdivide and sell or build and sell ?

[MelbInvestor]

Hi Everyone,
I need your input into making decisions.

2 years ago I bought this property in Hoppers Crossing, Vic. It is a corner block but triangular in shape. The land size is 722sqm and has a single storey house on it (12 sq). I engaged a town planner and architect to use the land available at the back of the existing house. Now I have approved planning permits and all architectural drawings for a double storey, 3 bed, 2 bath (22 sq) dwelling at the back of the existing dwelling. Because its a corner property, the two driveways will be separate. I asked the planner to use the max allowable space.

Now its time to decide as to which stage should I sell it.
I have talked to a builder and I was told that the cost of building will be around $11K / SQ. The cost of building then would be around $240K. Plus there would be other costs before its ready for sale. New and near new similar properties in Tarneit (2 mins away ) are on sale for around $300K
Does that mean that if I build and sell, then I lose money ? Where is the value of land ?

Would it be better if I just subdivide the property and sell it with a separate title ? I was told that the cost of subdivision may be between $15K to $20K. I have seen similar type land on sale in Hoppers Crossing for about $135K to $150K. If this is a possibility, then maybe my profit will around $100K?

Or should I just try to sell the property will approved planning permits ?

thanks a lot.

 

[Aaron_C]

If you sell it with the permit you probably won't get any value for your permit.

 

[MelbInvestor]

Has anyone built recently in the western suburbs of Melbourne ? Whats typical cost of building per sq ?

thanks

 

[ark8]

Has anyone built recently in the western suburbs of Melbourne ? Whats typical cost of building per sq ?

thanks

A recent project we worked on in nearby Truganina on a 600sqm site yielded two compact 2-storey townhouses behind an existing single-storey dwelling. Because the building had to "work harder" to achieve the two additional dwellings, the build costs averaged out at $1400/sqm. The land price when the site was purchased was about $110K, thus averaging $37K per lot. One of the townhouses was pre-sold at $260K. As they went retail for their build, it seemed then that this was the way to get the site to work better financially for the owners.

Depending on the design of your dwelling, $11K/sq sounds about right for an entry-level "standard" product.