One stop shop for townhouse development

Hi Steve,

It's a good sized property, and one would think 4-6 dwellings, depending on size, car parking, and proximity to amenities, would be a reasonable outcome.

Before approaching anyone regarding this sort of project I suggest you put your targets in writing. I find, in dealing with clients, that the "triangulation principle" can work well to start that process.

Generally there are three competing priorities for this type of project:

1. Cost. Are my financial resources finite?
2. Size. Is there a minimum or maximum size from which I will not budge?
3. Finish. Is there a minimum finish with which I will be satisfied?

You can add "time" to the mix as well, but this is generally tied in with cost.

Only one of these priorities can sit at the top of the triangle. Establish which it is and the other priorities will fall into line.

For example, if cost is at the top of your triangle, then size and finish will have to fit your budget.

Your research might determine that the end value of your townhouses is $500,000 each, and you have paid say $750,000 for the land. Assuming you want to achieve a margin of 20%, then you project costs (budget) is the bit in between.

5 x $500,000 = $2,500,000.
($800,000) acquisition and costs
($500,000) margin at 20%
$1,200,000 is then you project works budget.

$1,200,000 / 5 = $240,000 (per dwelling)
$240,000 / $1,500 (per m2) = 160m2

In this way the budget drives the outcome and you would then have a simple instruction for your team:

Design me 5 townhouses, of approximately 160m2 each, that can be constructed (including peripherals) for $1,200,000.

Good luck with the project Steve.

No worries Steve.

1. Yes, project costs should always encapsulate all costs.
2. I'm not here to advertise Steve – I get at least as much information as I give – but, yes, we do that sort of work.

 And again, best of luck with the project.

Emma,

It's a vexing issue!

It's a combination of my own experience – I've built a lot of houses – and industry averages.

The industry averages can be found at BMT Associates (quantity surveyors) website. I have no affiliation with BMT, but I have used their services and their industry averages are comprehensive.

At the moment, for example, a 3br brick veneer town-house over two levels, and of a medium level of finish, built in Sydney, is costing $1,480/m2 on average.

Some projects can be delivered for less, and some for more. If your figures work okay with a $1,500/m2 budget then you can proceed with some confidence, knowing you have the ability to manipulate cost elements to meet your budget.

No worries.