Subdivision in SA

Discussion in 'Adding Value' started by tarah, 15th May, 2008.

  1. tarah

    tarah Member

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    Hi all,

    I am hoping to subdivide land I have in Adelaide but would like to keep the tenants in the existing house until I can afford to knock down and build two dwellings.

    I have never subdivided before so would like to know if you can still keep the existing house on the land and subdivide?

    Also, does anyone know roughly how much subdivision costs are in SA? The council said roughly $20,000?

    Thanks
    Tarah
     
  2. Gools

    Gools Member

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    Hi Tarah,

    The figure of $20,000 is correct for a sub division. Sometimes more, sometimes less.
    You can keep the existing dwelling in place when it gets divided but not sure why you would want to do it early, you'll end up paying double rates etc.
    Wouldn't you be better off leaving it closer to the time of development to do all this? Depends how long you are talking of course.
     
  3. tarah

    tarah Member

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    Hey Gools,

    Thanks. Yeah, probably will build in 6 mths to a year if can get finance! I have heard it can take at least 6 mths to subdivide or at least get council approval. Does this sound right to you? I am hoping to create some more equity in my portfolio by subdividing to build these two dwellings and then hopefully onto the next property!

    Thanks for your help!
    Tarah
     
  4. RumpledElf

    RumpledElf all fun in the big city!

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    $20k seems excessive ... why would you subdivide when the costs are more than the value of the land you're dividing? You can get an entire HOUSE for $20k ...

    Anyone got a cost breakdown on that?
     
  5. steveadl

    steveadl Member

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    $20k to subdivide in Adelaide is about right (as Gools said, give or take), outback SA would be cheaper. Not sure where you can get land for $20k in Adelaide RumpledElf, but if you find some - let me know! :eek:
     
  6. RumpledElf

    RumpledElf all fun in the big city!

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    I was thinking it would be about the same to subdivide as the purchase costs for a house ... which for the one I'm under contract for, is about $4000. Adelaide councils must be raking in the dosh down there. Don't you guys pay $1000s a year in council rates while we pay $500 a year up here?

    Not Adelaide, but there's a biggish subdivision going on in Gladstone (near Clare) that is $15k a block :) Where I'm looking, most land is $50k a block and the block I was thinking of dividing off would sell for about $35k as it would be a bit smaller than normal (650sqm). Hence the :eek: at $20k in costs ...
     
  7. steveadl

    steveadl Member

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    Yes they are RE! :rolleyes: You get a bit of relief on some minor fees involved when you do more than one, but generally - you can look at $20k per additional lot you're splitting a site into. (note, this is just through my research, I haven't done it yet)
     
  8. RumpledElf

    RumpledElf all fun in the big city!

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    Ok, you made me look at council fees and charges for the area I want to buy in. I assume there's extra fees for titles lodgement etc and you still need the surveyor and probably an SA water connection, but check this list out:

    Lodgement Fees for all Development Applications 33.75
    Minimum Building Fee 36.75
    Planning Assessment Fee (for development < $10,000) 20.80
    Planning Assessment Fee (for development > $10,000) 68.50
    Planning Assessment Fee (for development > $100,000) 1%
    Fees per square metre for Sheds & Outbuildings 0.55
    Fees per square metre for Dwellings, extension to existing 1.86
    Application for installation of a septic tank 256.00

    The most expensive fee was for an 'extra depth grave' - $409. I think I'll pass on that one.

    Is it any wonder that every decent sized town in Northern Areas is teeming with development and that businesses actively relocate out of adjoining council areas into Northern Areas? Their council development plan could give yoru average developer wet dreams. Even their rates are good value, mine are $500 a year and the IP I want to buy is $600 a year, but my house is valued at 1/3 of the IP - it is just in a different council area.
     
  9. steveadl

    steveadl Member

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    Those fees do look damn nice! Make your development look that much better when doing the figures.

    Question though since you're in the country. Are the costs of construction greatly increased by being further out, or is it not too bad? I assume it would'nt be too bad if you're near a large regional town?
     
  10. eKwatee

    eKwatee You Snooze, You Lose

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    A large portion of what the council quoted would be for sewer and water.... They would have given Tarah an overall estimate
     
  11. RumpledElf

    RumpledElf all fun in the big city!

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    Houses here tend to be either transportables that come in on a truck or absolutely huge sprawling single-storey brick places, nothing in between. I guess it isn't worth cutting corners building a small house if you can get a big, cheap block of land. The problem is more the length of time anything takes to happen (especially if a business is waiting for 3 or 4 rural jobs to build up so it's worth the trip to combine them) and delivery fees for small things like landscaping supplies can be high, and a lot of places won't deliver at all. Tradies can set their own prices and there can be a LONG wait for them. Cold-water plumbing is usually a DIY affair as everyone uses polytanks, electric pumps, plastic pressure pipe and septic tanks. However, its surprising what you can get out here once you figure out where to get it from, as a lot of stuff can be ordered in if it isn't usually in stock. Just have to wait.

    It occurred to me after posting before what that 1% fee for development over $100k means to the council - there is a multi-multi-million dollar power station being built, and the operations hub is proposed to be built about 3 blocks from the IP I want, as is a new supermarket complex. I assume the council gets their 1% out of all that.

    Did I convince you to buy a block of land for $15k in Gladstone and stick an IP on it? :p
     
  12. steveadl

    steveadl Member

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    Almost, but with my latest purchase, won't be able to afford it! :p
     
  13. eKwatee

    eKwatee You Snooze, You Lose

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    I know the land is cheap, it mentions in the ad there is only water on 1 block, a big cost is getting water on your land. Is your block the one with the water on it.

    Out of interest, what is the rental demand like in Gladstone?
     
  14. RumpledElf

    RumpledElf all fun in the big city!

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    Honestly, I don't know that much about Gladstone, the ad for that subdivision just happened to be on the same board as the ad for the house we're trying to buy. It is just north of Clare. It has a traffic light so it MUST be a big town!

    People often do water from tanks not mains connection, so add maybe $3000 for tanks and a pump, and $whatever for a big hole in the ground for a septic tank. Gladstone is about the ONLY place round here that ever has rentals advertised, not sure what that means. Probably the same rent levels as everywhere else here, $110-150 a week. It does have local jobs, is growing, and don't buy right next door to the explosives factory ;) (it blew up about 2 years ago). The bigger towns in the mid-north are nice retirement/tourist destinations.
     
  15. Mamaof3

    Mamaof3 Member

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    yep those earlier figures quoted are right....$20Kish for torrens title and $12Kish for community title.
     
  16. TommyR

    TommyR Tom

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    Yes those figures are about right, I just got the bill from SA Water for two additional water meters and sewer connections - $17K on a torrens title subdivision.

    Tom
     
  17. Pablo

    Pablo Member

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  18. lizzie

    lizzie when i grow up ...

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    i'm not quite sure what rumpled elf is getting at - but yes - subdivision, including water/sewer and electricity, will cost around $20-30,000.

    but - on the bright side - you're gaining a completely new block of land. i don't know where else you'd get a block in central adelaide for the price. granted the orginal property will possibly lose a little value because it has lost land - but generally this is not much.

    for example - i can buy a house on a large-ish block for around (using round and random figures) $300,000. subdivide $30,000. orginal block now worth $280,000 - so i've paid $50,000 for a block of land that is worth maybe $150,000.

    not bad figures really.
     
  19. RumpledElf

    RumpledElf all fun in the big city!

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    Just saying, if you buy a big block of land for say $40k and subdivide it into 4 smaller blocks and sell them for $15k each (as per Gladstone), you're either making an enormous loss or it does cost substantially less than $20k per block to subdivide. At least in Gladstone, anyway. I was looking at a subdivisible block a few weeks ago: the agent said it would sell for $90k and be divided into 3 blocks which could sell for $50k each. Again, if the costs of subdivision were so high, noone would subdivide! (that particular block was advertised for $135k but the agent said the vendor was dreaming, there's no way he'd get more than $90k. It looked to be divisible into 4 blocks at face value - 4300sqm total - but there was a 5m wide easement down one side so it could only practically go into 3 blocks).

    My PPoR block is 2000sqm and has three street frontages, if I subdivided it I'd be lucky to sell half of it for $1000 (although I could save money by not paying rates on it so the council repossesses it and then I wouldn't have to mow it). The base fees are significantly higher than land value where I live, which probably explains why people persist in selling adjacent separate-title blocks in clusters instead of being sensible and merging them into bigger blocks. That way you'd only get one fee for not mowing instead of one fee per title, although at least they do recognise adjacent vacant blocks owned by one person and let you mow around the boundary of the total area instead of each block individually. Land is not just worthless, it costs in upkeep.

    Blocks here (even in townships) are usually sold sans water, sewer and electricity. Looking at the page posted earlier, the fees to survey and lodge title apps are quite low, council fees are insignificant, so is most of the cost just digging bloody great big holes to connect water and sewer?
     
  20. Gools

    Gools Member

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    But as Tarah was asking about subdivision costs for her block of land in Adelaide then the real answer lies somewhere between $17k at the least and probably $20k+. Without more information on the site we're not able to make a more accurate judgement.