Hi there. I’m looking into building 3 units in Carrum, just north of Frankston in Melbourne.
The market seems to be looking for single storey 3br, 1-2 bath, 2 car grge units and the new ones in the area are selling from $300k upwards.
Each parcel of land is roughly 300 sqm and each unit would need to be roughly 15-18 squares (in grge).
Can anybody tell me in what range it would cost to build 3 such units?[juggle]
Cheers!
Guy
Anyone?
Cheers!
Guy
It depends on the quality and because of the location (which I know well) and relatively low end values, you would have to keep the finishes on the low side.
We have just completed a 3 townhouse development in Bonbeach (next suburb) and are invloved in building all over Melbourne.
Currently the all up costs including landscaping, fences, carpets, window furnishings varies from $1,150 per sq mt (ths is all up area – unit ples garage) to $1,450 per sq mt (better finish difficult site Richmond)
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auThank you Michael,
That’s great. When you say all up costs, does that include obtaining permits etc in the first place?
Also, is it realistic to try and fit 3 townhouses/units onto a 1009 sqm block – approx. 20m by 50m?
Cheers!
Guy
Sorry – I meant to ask if you think fitting 3 3br, 2Car, 1-2bath units into a 1009 sqm block was realistic.
Also, you knowing the area well, what would you say the market is looking for as far as these units are concerned?
Cheers!
Guy
You will be pushing to get 3 3 br with dlug that are single storey.
An excellent builder in the area is Paulding Constructions or Rodian homes and if you are looking for a good town planner/designer/surveyors call Taylors Development Strategists 95012800
If you speak to them they will give you a good indication of costs. I would of thought that you would expect to be at $145 – $155 including all costs per unit (no land)
cheers bill
Originally posted by Zulik:Thank you Michael,
That’s great. When you say all up costs, does that include obtaining permits etc in the first place?
Also, is it realistic to try and fit 3 townhouses/units onto a 1009 sqm block – approx. 20m by 50m?
Cheers!
Guy
The cost I suggested does not include the costs of permits, but would include council drainange and sewerage fees etc.
Can you fit 3 units on?
It depends. The size of the block is only one determining factor. There are many other factors to take into account.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auHi Zulik,
Whatever you do make sure you get an excellent architect or drafty. This will have a major impact on how many units and what size you will be able to fit and also on the end value. If you would like a referral to some very good designers please drop me an email and i will forward you some names.
Regards
Alistair Perry
[email protected]Thank you Bill and APerry, that’s very helpful. I will certainly be following these leads up. Michael, what are the main other factors affecting how many units can fit on the block?
Cheers!
Guy
Originally posted by Zulik:Thank you Bill and APerry, that’s very helpful. I will certainly be following these leads up. Michael, what are the main other factors affecting how many units can fit on the block?
Cheers!
Guy
There are a heap of factors such as council zoning, neihgbourhood charecter, setback of neighbouring properties, northern orientation, site constraints, existing vegetation, floood levels, easements, overlays
We take all the above into account when we doa prepurchase feasibility study before we even start drawing some sketches.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auIn Queensland we can produce a 4 bed house 16squares for $138,000.00 where on earth does $1100.00 per/m2 come from is beyond me unless the commission is very high.
Mike what is your commission back from the builder or is this a two storey price. We just completed a two storey Westminister 38 sq project home for $342,000.00 including ducted air (11 outlets) $45,000.00 water detention pitt, granite kitchen, marble floors to bathrooms and ensuite, two storey, 5 beds, turn key etc etc that works out at $900 s/m in Sydney.
Or is it that Melbourne is just that expensive, as i said on other posts we build in QLD turn key with air and all the bells and wistles at $750 s/m
resiwealth – i’m confused
Originally posted by resiwealth:In Queensland we can produce a 4 bed house 16squares for $138,000.00 where on earth does $1100.00 per/m2 come from is beyond me unless the commission is very high.
Mike what is your commission back from the builder or is this a two storey price. We just completed a two storey Westminister 38 sq project home for $342,000.00 including ducted air (11 outlets) $45,000.00 water detention pitt, granite kitchen, marble floors to bathrooms and ensuite, two storey, 5 beds, turn key etc etc that works out at $900 s/m in Sydney.
Or is it that Melbourne is just that expensive, as i said on other posts we build in QLD turn key with air and all the bells and wistles at $750 s/m
resiwealth – i’m confused
There is NO commision or hidden extras.
I am quoting average prices of medium density multi unit contruction, which was the request, not houses.
We currently have 95 medium density ( 2 to 10 townhouse) developments under project management at various stages from town planning to completion. Over 20 are projects currently under construction and we use a panel of of 7 builders.
I also have my own construction company for our own projects – currently doing about 12 town houses a year.
So we have a good and broad based database of costs.
Obvioulsy a single house costs less and we can’t compete there with the volume builders, but on muliti unit developments our costs are as good as we can get.
Townhouses have landscaping, paving, and soft furnishings inside so tenants can move in this costs.Boy have prices gone up. Not to long ago we were quoting $850 per sq mt
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auCome on Resiwealth – even I know that medium density costs significantly more than houses per sqm!
A duplex might have the same floor size as a large house but you are factoring in two kitchens, four bathrooms, two garages, two pergolas, etc etc
I think the gibe about commissions was a little below the belt as well.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
$1400 – $1500 per square metre has been the known estimate for construction of very good quality finished apartments since around 1997.
I know that top quality in Queensland is not like top quality that you would find in Sydney or Melbourne.
No offence to Queensland residence but it’s true.
And as for 4 bedroom houses for $138k, makes me question many things:
– are they kit/project/spec homes??
– how expensive are the finishes??You have to understand the market you are pitching the property at to understand the expense you need for the finishes!
In other words, a $138k 4 bedroom home may only have basic white bathroom items, simple shower screen, plastic floor wastes, basic chrome (possibly even plastic) towel rails, etc, etc.
And this may be fine for a young family in an outer suburb that on average has poor quality, old housing. But a $300k luxury apartment that is pitched toward a young single person or couple will need to have items and finishes that are of higher quality and therefore higher price.
Learn, Love, Strive. Make a difference!
Zulik,
There are a lot of hidden expences when building units.
Contribution fees for sewer , tapping fees for water,sub div fees,running services under ground to the property from whereever they are the builder doesnt pay these the owner pays it.Council has some fees that normal home does not pay but unit developement does, if it is the frankston council you will have to put in storm water tanks to allow for flooding if your lucky this will cost about 20 to 30 k, the list goes on and on.
This forum shouldn’t be called developement made easy it should be called developement why bother.
Not to be negative but most projects I have done it take just as long to get the permits as it takes to do the job.Good luck
Monopoly, my favourite game
Thanks everyone for your contributions. I think at this stage that the deal is a little too skinny to go through with.
I bought the property about 10 months ago and it was my first purchase ever. I saw $ signs because i could see that units were selling for almost as much as i bought the property for.
I think i was a little naive. I’m not sorry because i can comfortably sustain the cash flow for the next few years and i’ve already learnt a lot. I still beleive the area is going to grow because of all the development nearby and it’s proximity to the beach and Melbourne’s southeast growth corridor.
Perhaps i will be able to develop it in the next couple of years if/when there is some capital growth.
I wish i had someone who i could sit down with, go through all the numbers and decide whether it was worth persuing in the shorter term without having to spend a lot of money.
Maybe one of you very experienced developers (Michael, Rikky, buzzwells, Alistair or Bill) would be able to tell straight away by hearing the numbers?
Land size: 1009 sqm
Land cost: $335k
Land dimensions (approx): 20m x 50m
Council: KingstonIs it far too skinny?
Cheers!
Guy
Give me a call I will let you know what is involved .0408355568
Monopoly, my favourite game
Hey Zulic,
Since we all have been follwoing this post…do you want to share what you have decided.Iam in pretyy mucg same position and will really like to know more.
Hi Zulik,
When you get a chance I’d also like to know what you find out and what you decide. I have also wished for someone with developing experience to sit down and nut out the fine details with us.
I’ve got a large block with an old duplex on. Like you I saw development $$$ when I purchased but the whole thing became too hazy and too much of an unknown to pursue ATM. Although zoning allows for 4 dwellings we thought that a triplex (so all could have road frontage) would be a better choice for the location.
Lucky enough the returns as they stand (almost 10%) are reasonable enough to just hold and see what happens.
I still suspect some sort of development would be a better investment decision than just sitting but…
Looking forward to an update!
Sonja
djones & Sonja,
Apologies for not responding for so long! Thank you for your interest. There’s so much going on at the moment – crazy time of year.
I have put development plans on hold for the moment. I have decided to go through the development approval process in the new year. I want to have the plans through by the end of next year
Apparently the approval stays valid for 2 yrs so hopefully within that time frame there will have been some growth in the area and the market will have turned around.
I think the biggest risks are 1. the potential for building costs to blow out (including time delays and associated holding costs) and 2. the possibility of not being able to sell at the end for the necessary price.
The second can be somewhat mitigated by selling into a stronger market. I guess there are ways of mitigating the former as well but it becomes a little less crucial if the selling is more certain. I still beleive that the area i bought in will have growth in it within the timeframe. This will help make the whole project a little less skinny.
I think you’re in a great position Sonja with positive cashflow in the mean time. Would be great to know what you decide to do in the end as well.
I’ll be taking up some of the generous offers for time and consultation in the new year. Thanks!
Cheers!
Guy
You must be logged in to reply to this topic. If you don't have an account, you can register here.
