New Estate blocks getting smaller?

Most developers will be squeezing as much out of a development and as such will maximise their return for the smallest lot possible. It is also sometime dictaed by government.

I’m currently working on a JV for a large national developer and the government agency tendering out the development stipulate how much of each lot size shall be provided.

Duplex lots are generally in difficult to fit into two normal lots that could be marketable. A duplex sized lot still allows 2 dwellings and sometime provides affordable housing in certain developments.

Anyway, that’s my take on it.

Later………

If you think you can you can, if you think you can’t you can’t.

Although the government plays its part, you will likely find smaller lots are a result of demand and maximizing capital gains.

I have just completed a transaction where the only option was to acquire multiple adjoining lots [due to their size and to prevent view obstruction] in order to meet the developments objective.

At first acquiring adjoining lots – to build a duplex for example, may appear a costly endeavor. But it is all about the numbers [feasibility].

If the project is feasible you will likely find your out-of-pocket investment and time commitment do not vary to any great extent, i.e. securing two adjoining lots versus one smaller lot.

It all depends on how you secure the land.

As an example, because we acquired adjoining lots our bargaining power increased. The end result being the land was secured with a small [refundable] deposit and settlement was delayed for two years – when the project is completed.

Although this is a larger scale development than a duplex – which can provide more leverage, the same principles apply.

For example, the land owner may agree to settlement when your duplex is completed, i.e. for a small premium above the asking price – although this should be the last card you show during the negotiation process.

Subject to supply/demand considerations, typically the asking price is at a premium, i.e. testing the market. The land owner is more than often prepared to accept a lower figure – which he/she will have established.

At the end of the day, the bank/primary lender should be covering the cost of the land – this is not an out-of-pocket cost, but the lower their perceived risk/up-front debt, the more leverage you have in terms of securing a lower interest rate and/or more capital.

It is all about the agreement you can reach with the land owner. You may be surprised what can be achieved after sitting down and discussing each parties objectives.

Keep in mind zoning provisions do need to be investigated if considering a single development, i.e. duplex, on adjoining lots.

— Michael

hi waynel2

I have noticed the same thing, I am looking Port Kennedy, Secret Harbour. There have been a few but mainly corners still around 900sqm so not too bad. Unlike some near success 440sqm for duplex block, single story restriction. I thought they were joking. You could buy the block next door 600sqm and 20k less but only 1 dwelling. Still on my search, stumbled across this forum today, looks like it will provide lots of good tips.