The Economics of Subdivision - January 2017

Originally posted 27 January 2017. I'm often asked about costs and timing related to the Land Subdivision process in the Gold Coast, and given that serviced, vacant lots can command as much as much as $500k given their scarcity in the Gold Coast, I thought I'd dedicate this blog post to sharing with you the process involved for a typical 1-into-2 subdivision to create a vacant, serviced lot.  This can be used as a general guide so should you be interested in learning more, I'm available to discuss the particulars of your site.  

Preliminary Analysis

The first step is to determine if a site is able to be subdivided based on the provisions of the relevant plan or development scheme, in the first instance in relation to minimum lot size requirements. Assuming the proposed densities are appropriate, the next step is to look at the overlay mapping to determine what site constraints affect the site. 

These could include:-

- bushfire risk

- landslip risk

- environmental significance (e.g. vegetation, koala habitat, wetlands)

- flooding risk

Should a site be affected by any of these issues, an expert technical report could cost between $1000 and $4000.  The result would be analysis and reporting that will provide certainty to determining if a subdivision is able to proceed. 

Additional reporting/service costs will include:-

- Engineering services report (confirming water, sewer, power) -  $1500 to $4000

- Surveying - $1500 to $3000

- On-site Effluent Treatment reporting (if not on sewer) - $500 to $1500

- Town Planning - $5k to $10k depending on complexity

Total analysis costs are on the order of about $15k to $20k, and generally speaking this analysis  and documentation can be completed within about a month.

Lodging an Application

Council fees will range between $1500 to $4000 depending on complexity.  Timing for an approval can range from 5-20 days (Risksmart) to 3 months (Code Assessment) to 6 to 8 months (Impact Assessment).  Impact assessment, the highest level of assessment, requires public notification and Council must 'consider' any objections raised by the broader community. 

Compliance

Once an approval to subdivide has been secured (i.e. decision notice) the single greatest expense to the owner/developer often relates to servicing the new lot.   Connections to water and sewer connections can be on the order of $20k per 20 linear metres. Power and telecommunications connections can cost about $4k to have connected. The surveyors final step in the process is the register the site plan with State, at which point a lot becomes saleable. 

Bottom Line

As a general rule, an owner interested in a subdivision on their site should budget $35k for a simple subdivision and up to as much as $70k for a more complicated reconfiguration of lot.  The entire process can take as few as 2 months, and up to 10 months or more.  However, given the price and scarcity of vacant serviced land within urban areas of the Gold Coast, this expense is often well worth the reward.

Notably, no development application is required for a primary dwelling on a newly created lot. 

If you have any questions about this process, or what can be done on your property, call Tactica on 5522 5063.