Duplex feasability, cost and risk

I was wondering if anybody could help me with my maths!

My wife and I, along with her brother and his wife are looking to go four ways on a loan, buy a property in Sydney near to where we all grew up, and build a duplex on it – one side for us to live in and the other for them. I am not too worried about the value of the developed property in the short term as we plan to live in the duplex for a number of years while our kids grow up. I guess I need some advice regarding my calculations on the overall feasibility of this project as well as our ability to make sure we can service the loan – as I see it, the main way that we could get burned by this experience is if we get most of the way through the development, decide we can’t service the loan anymore and have to sell for less than we have spent. In ensuring this doesn’t happen, I need to do my calculations now and I’m finding that the overall development costs are hard to work out, thereby leaving me with a few questions about whether we can pull this off.

We are looking at building 2 equal sized attached residences, on quite a flat block of land, with the following basic specs:
Around 175sqm per residence
2 x 4 bedrooms
2 x single garage
Open plan living/kitchen area
2 storeys (bedrooms + main bathroom upstairs, living downstairs)
Tile downstairs, carpet upstairs
Slab on ground with in floor heating
Fire and sound rated centre wall
Brick veneer (rendered)
Parapet roof
Basic to medium fit out
Basic landscaping

From reading the forums, doing some research and speaking to architects and builders, I get the impression that we are looking at around $1200 per sqm to build (And I understand this is approximate). So here are my questions:

1. Does $1200 per sqm seem reasonable?
2. Is $1200 per sqm roughly what a builder would charge me, (or is this purely a how much it costs a builder to build therefore I need to include the builders profit margin as well)
3. Does around $10,000 seem OK for basic landscaping (total building size is 350sqm, land is 580sqm less driveways and side passages) I’m not thinking about much more than turf at the moment
4. Does $15,000 for plans, working drawings and council application fees seem reasonable
5. If that all adds up to around $450,000 and I add in around 10% contingency for demolition, service disconnection and reconnection fees, cost of building the council sidewalk at the front, etc – is $45,000 reasonable to allow for these extra hidden costs?

If all that adds up OK – we are looking at a total construction cost of around $490,000 including some basic landscaping, council and architect fees. Land purchase price is around $725,000 and we will have paid around $65,000 in interest prior to and during construction and around $30,000 in stamp duty. So our total costs are around $1.3M ($650,000 per couple). A similar duplex development in the same street has recently sold both residences at around $830,000 each.

I guess my worry is that if the housing market continues to go down and interest rates continue to rise, I could be left at a point where I can’t service the loan and can’t afford to sell!

Am I making any sense! Any help is very much appreciated.