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Simon (and the other contributors),
I stumbled upon this conversation by chance. We have been involved with duplexes for over 10 years and have submitted over 160 duplex DAs in the last 3 years (Sydney and Central Coast only).
The main attraction of duplex developments is that they explore a little known property market anomaly: you can get as much for a 4 bedroom duplex (on 1/2 land) as you can for a 4 bedroom house on a full size lot.
Over the last several years we met a number of clients that got ‘undone’ by different ‘name’ builders. The main reason is always the same: hidden costs. While they may advertise duplexes with prices starting ‘from’ $299,000 (or similar), the truth is that it is going to cost you close to $0.5M, once you calculate site costs, fees and contributions and items ‘by owner’.
I agree with ‘resiwealth’ that it pays to have a well appointed duplex offered to the market.
So, my business partner and I started a new company specialised in duplexes. If you visit http://www.duplex.com.au, you will find answers to most technical questions that you may have.
From the investors’ point of view, having direct experience in Sydney market only, we find 2 areas that are getting rather ‘hot’: Bankstown and Ku-Ring-Gai/Hornsby councils. In Bankstown you can buy a 40 years old weatherboard house on a 600sqm lot for $400,000. The cost of construction is (as I explained) somewhere over $450,000. They sell for $530,000+ (check http://www.realestate.com.au). We get DAs through Bankstown Council for 4-6 weeks (unheard of, I know). Another good point is that in Bankstown the sites sloping towards the back can be drained to the street (charged systems are allowed). This almost doubles the number of available lots to over 40,000.
Northern Suburbs are more difficult: it takes more than 4 months to het a DA approval. The benefits are, however greater: with the land costing $800,000-$900,000 and duplexes selling at $950,000 to $1,050,000. The lot sizes on the North side are larger, but the FSR is lower, meaning that you end up with large backyard, sometimes people don’t even realise they are looking at a duplex.
If you are an entry level duplex investor, it may pay to canvas for elderly house owners in appropriate suburbs who would love to exchange 1/2 of their land for a brand new 3 or 4 bedroom duplex. You may have to look at a single storey / two storey combination in order to accommodate their needs.
Plase do not hesitate to contact me if you wish to discuss duplexes in detail.
Regards,
Igor Vavrica
[email protected]
