Torrens vs Community subdivision - Adelaide values

Hi all,

I new to this, so please be kind :eek:

I have searched the forums for an answer to a question similar to this, but can't really find anything relevant, so please excuse me if this has already been answered.

I am looking to subdivide a 1600m block in the inner southern suburbs of Adelaide (5km from the CBD) into 6 allotments and am trying to decide if I will get value out of making them torrens title vs. community title. A few details:

  1. The existing allotment is a 1600m2 corner block
  2. All of the 6 new allotments have street frontage, so there will be no need to run services over allotment boundarys and therefore I have the option of subdividing into torrens title allotments
  3. I am planning to build 2 sets of 3 row houses on the six allotments and sell them immediately. One set will be single storey, 3bed, single garage, 2 bath. The second set will be double storey, 3-4 bed, double garage, 2 1/2 bath. Final values for each will be in the $420k - $500k region
  4. One street frontage doesn't have SA Water services, so to go torrens title, I will need to get SA Water to run new water and waste services. I have had a preliminary quote from them of around $45k to do this.
  5. Quote for SA Water to go community title is around $5k (to install new meters, manifolds, etc.)
  6. By my calculations, subdivision costs will be similar for community and torrens, except for the above mentioned SA Water.

So, my question is, will torrens title increase the total value of the 6 new properties by more than the cost differential of $40k? i.e. $6667 per property?

Aspects that I am attempting to consider:

  • I am planning to build row houses, so torrens title doesn't necessarily make sense
  • Buyers at this price point in this area seem to value torrens title, although I have no clear evidence of this
  • I suspect I will have other costs from my builder for running internal infrastructure if I choose to go community title

An opinion from any those of you who have done this before would be very much appreciated.

Thanks.
 
I hate strata with a passion. Nothing annoys me more than having to pay for someone else's crap/opinion.

I am of the opinion that in strata there will always be at least one person who wants to spend money or when things go wrong, they will adopt the attitude of "I pay strata every quarter, so strata can pay for this problem", not realising that this stuffs everyone else up.

For that reason i would gladly pay more than $6,667 just for Torrens title.

Just the piece of mind that I dont need to attend Executive Committee meetings and deal with dip$h!ts is worth the extra :)
 
I hate strata with a passion. Nothing annoys me more than having to pay for someone else's crap/opinion.
For that reason i would gladly pay more than $6,667 just for Torrens title.

Totally agree. $6667 is peanuts compared to the imprisonment of strata.
 
Nek and Amadio, thanks for your responses. They reinforce what I already suspected - the mere perception of "community" or "strata" is a significant negative.

Do you think that this would be the case even though the community land will only comprise a small area that would house the common water manifolds, gas and electricity services? In theory, the upkeep of this area should be negligible.
 
Yes. Small area or big area, its the idea of strata itself that i find to be a turn off.

My friend has a duplex in the area i want to buy. Its a nice place and he's looking to sell. There is a common wall between them and thats it. Everything else belongs to the individual.

Unfortunately it is still strata'ed and the only thing they share is the building insurance.

That said, while things are happy, theres no problems, but what if one decides not to pay because they were offended by something the other neighbour did.

If it torrens titled i would probably buy it off him. Because its strata'ed that theres no chance i would buy it off him.

Personally i think there are people out there who have been burned by strata in the past and seeing a place that could be torrens titled but was strata'ed could be a deal breaker.

To me strata is a big unknown when doing my calculations. Strata could start off low, then the 10 year sinking fund projection kicks in and next thing you know, my quarterly payments have doubled. At least with torrens titled i dont have to worry about this.

Furthermore, assuming you've priced those townhouses correctly, i would only contemplate buying one off you if the price was about $50k cheaper, thats how much i personally hate strata. That said, anyone who has asked about what i think about a certain place, if its got strata my first question to them is "Are you sure you want to get involved with strata".

I reckon they would sell quicker and for more if they were torrens titled.
 
[*]One street frontage doesn't have SA Water services, so to go torrens title, I will need to get SA Water to run new water and waste services. I have had a preliminary quote from them of around $45k to do this.
.

Does the SA Water quote allow for the new connections to each as well as the running of the connections to each site.

In answer to your question, I would Torrens Title.
 
Good point about the new connections - I hadn't really considered that :eek:

The preliminary quote doesn't mention provision for them and so is ambiguous. From their quote: "The costs associated with providing sewer and water via a mains extension would be in the vicinity of $xxxxx for sewer and $xxxxx for water if the proposed development goes ahead."

Having said this, I have spoken to SA Water on a couple of occassions and they have not mentioned extra costs over and above. Still, I am a little nervous that I have missed this. I might give them a call tomorrow to confirm.
 
Totally agree with what has been said. If you are going to be selling the dwellings then spending less than 2% of their value to make them torrents title is a bargain. You would find a fair number of people that don't really understand Community Title and would not have the courage to buy it at any price. The last thing you want to do is reduce your number of potential purchasers.

Would it be worth your time running your options past an expert, someone like Fyfe for example? Just in case you are missing something in your calculations.

Gools
 
Oh and someone in the property business also said to me that if a property or land was community title it would take longer to sell too.. so thats something else to think about.
 
The consensus definitely seems to be torrens title.

I have now confirmed with SA Water that their quote does include new meters for all titles. In their words "The quote includes everything" :D

Gools, thanks for the suggestion regarding Fyfe. I have considered using a development consultant (there seem to be a few), although at this stage I am simply running my numbers past as many people as I can (my bank, surveyor, conveyancer, builder, engineer, council, etc.). Using this approach I have been able to gradually refine my numbers to the point where I am reasonably confortable with them.

Roughly, my figures for subdividing 2 titles into 6 torrens titles are:

DAC Application fee: $1200
DAC Open Space Contribution: $21720 (4 new titles x $5430) GST ex
LTO Fees: Approx. $2000
Mortgagee fees: $400
Conveyancer fees: $600
Surveyor fees: $4000
SA Water: $46000 (quote to run new water/waste including new meters, etc.)

Obviously, I need to consider the connection of phone, electricity and gas on top of this, although typically these don't seem be included as "subdivision" costs.
 
Lee0709, thanks for the advice.

I think our posts have crossed. Yes, I have read the thread relating to the dramas you have had with subdivision, trees and plumbing. Of course, our dilemma is that it is impossible to know if we really are adding that $10-$20k of value through torrens title subdivision. I hope for you sake and mine that we are.

I have also sought opinions from everyone I know (real estate agents, builders, conveyancers, etc.). Almost all agree that torrens title is the way to go. I have had two notable exceptions:

  1. One real estate agent I spoke to suggested that the average punter would not be savy enough to destinguish between the two title types. Therefore the value of the property would not be effected and I should go with the cheaper subdivision option (i.e. community title).
  2. The view of one builder I was dealing with early in the planning process, who does a lot of development similar to the type I am doing, was that I should go community title because I am building row houses which will have common walls, etc.

Anyway, I think I have made up my mind to go torrens title, as the final product should be easier to sell and I should be able to at least recoup the extra subdivision costs.
 
  1. One real estate agent I spoke to suggested that the average punter would not be savy enough to destinguish between the two title types. Therefore the value of the property would not be effected and I should go with the cheaper subdivision option (i.e. community title).
  2. The view of one builder I was dealing with early in the planning process, who does a lot of development similar to the type I am doing, was that I should go community title because I am building row houses which will have common walls, etc.

With 1. I would have thought that when the potential purchaser goes to get finance that they will then become aware of the downsides of trying to finance a Community Title purchase. I doubt anyone would buy a Community Title dwelling without having to find out what they are about.

2. I don't see that as being a valid reason for going Community Title either. Going Community Title adds no benefit to the situation.

Can anyone confirm the cost of running a new phone connection? I was of the opinion that so long as you have the conduit in place that Telstra install the phone service for free for a new dwelling. Is this the case?

Gools
 
Why would you want to limit your customers to "average punters" only?

More customers = more demand = higher prices.

That real estate agent doesnt inspire a lot of confidence. What have other RE's said?
 
That real estate agent doesnt inspire a lot of confidence. What have other RE's said?

Others thought TT would add somewhere north of $10k to each of the six properties. The sum of the advice I have received certainly favours TT.

Can anyone confirm the cost of running a new phone connection? I was of the opinion that so long as you have the conduit in place that Telstra install the phone service for free for a new dwelling. Is this the case?

I can't help with this one sorry.
 
Can anyone confirm the cost of running a new phone connection? I was of the opinion that so long as you have the conduit in place that Telstra install the phone service for free for a new dwelling. Is this the case?
I thought it was about $270 - that's certainly what it is to add a completely separate line to an existing house. They charge the same to a new house as they try and charge you for an existing house with the phone jack yanked off the wall, despite it probably costing them $5 for a new jack and some screws in the latter case.
 
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