All Topics / General Property / How much to build a townhouse?

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  • Profile photo of ianvestorianvestor
    Member
    @ianvestor
    Join Date: 2003
    Post Count: 12

    Hi,

    I realise this question is like asking the length of a piece of string, but I am trying to get a feel for how much it would cost to build a townhouse. Say an average 2 bedroom, 1 bathroom townhouse in a block of 4-6 of them, in SEQ.

    Has anyone completed any developments recently of around 4 to 6 townhouses? If so what builder did you go through?

    Thanks!
    Ian

    Profile photo of bennidobennido
    Participant
    @bennido
    Join Date: 2004
    Post Count: 195

    I would like to add a possibly related question … how much does it cost to knock down a really old house and prepare the land ready for construction ?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Why not work on say $110 / – $120 Sq M so if you build a 85 Square Metre Townhouse then expect to pay around $93,500 $100,000.

    This does not include driverways, fencing, landscaping etc.

    I am lucky enough to have a builder as a Business partner in one of our Companies so cant make any real recommendations in Brissie..

    To knock a house down and prepare the land for construction will depend on the material used in the construction. If it is a Qld you may find someone will remove it for nothing however if it is a 2 storey brick home then you are probably looking at circa $20,000.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    Profile photo of Jon ChownJon Chown
    Member
    @jon-chown
    Join Date: 2007
    Post Count: 254

    Richards estimate of  $90,000 to $100,000 is OK for a single story building but would be lite on for two story – you can almost double it.

    Jon

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Jon

    Have to disgree $2000 / Sq M never. 

    We work on around $850 / Sq M for a 2 storey Townhouses admitedly that is at Builders retail pricing.

    Certainly with all the extras you maybe upto $1800 but certainly not construction costs.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Jon ChownJon Chown
    Member
    @jon-chown
    Join Date: 2007
    Post Count: 254

    Richard please contact me, my last block of three bedroom townhouses (just completed) came in at $205,000 each.   Yours at $85,000 means that the extra 15m2 for the third bedroom cost me  over $100,000.   I have as much work as you can do.

    Jon

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Jon

    As i say i disagree. We run a small sized development company (maybe do 40 units a year) and have never had a project overun to that extent.

    At $205,000 for say 120 sq M that $1700 / Sq M and take off say a Builders / Developers margin you are down to $1380.

    Add on Council contributions, other soft and hard and land acquisition and you must be selling at record pricing.

    At the moment we develop ever project we do so never take on external work but I guarantee no one is paying $2000 / Sq M for 2 a storey Townhouse.

    Can think of a dozen project we did last year and they never costs us anything like that.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Jon ChownJon Chown
    Member
    @jon-chown
    Join Date: 2007
    Post Count: 254

    Richard,

    I can see that we are looking at the equation from different sides of the fence, You as a developer quoting your cost to build and Me as an investor having to pay a builder to build.   So from my side of the fence the builders marginis a real expense unless I can convince you to build for me at cost. (which would  sure give me a better bottom line).   We did in fact pay $1782 per m2 and the saleable value of the townhouses would be in the High $400's and one would perhaps be valued at $500K but  we are not selling.   Have rented all out at $440 to $470 per week.

    I still believe that Ian would be better off working on a higher value than a lower one while doing his feasability study – just my thoughts.

    Jon

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