New rules for developers – but who cares?

I’ve noticed that some councils have started to allow people to build much more on house blocks.

It used to be that a 350 sqm block used to be the smallest house block you could build on…
And you could build one house, and that’s all.

Architects, small developers and a population increasingly worried about affordability have been pushing for smaller options.

There’s already a “small house movement” where people are building homes on the back of large trailers…

But now some councils are dipping their toes in the water and allowing, for instance, three small dwellings to be built on a 350 sqm block.

These are popping up as a “new thing” and taking the form of one building with dual or 3 keys… (livable spaces).

It’s cool.

It means that people can live with family, but all have their own separate space.

It means that young people can buy and get into the market when they might not have been able to previously.

As a developer, it means you can squeeze more profit out of a block of land, which means you’re likely to make more of these kinds of deals…

With the population increasing this is more and more of an issue…

I look at the population growth stats, and I wonder where all these people are supposed to live.

But when councils start allowing developers to build tighter and smaller, then it starts to make sense…

And profit wise it’s a good thing to be able to build three where you could only build one.

I was looking at some deals some of my students have done, and there were a couple of interesting examples…

One student landed a small group of shops. They were two stories with the upstairs being offices.

It was a good deal…but here’s what was hidden under the surface…

The council plans actually had a 36m height limit.

The block itself was only around 450m, but with that height limit, it means that they can build up to the tune of 12 stories!

They are looking at minimum 22 spacious dwellings…

And that’s still keeping the shops at ground level.

Can you imagine the rent on a thing like that?

I’ve already done that on a smaller level at my property in Bondi by putting first 2, and now another three apartments on a property that’s only around 240 sqm.

I’m now looking at a similar thing at one of my Newcastle properties which has even more scope for going up.

We’ve already taken plans to council, thinking in the back of our minds “There’s no way in hell they will ever pass this”…

But they LOVED it. Said “This is exactly what we’re looking for”.

My architect nearly fell over on the spot.

And we’re not even going to the full allowable height.

This is one of those things that can turn a regular deal into an amazing life changing deal.

Obviously using development as an upside is slow, can be costly and can be a big undertaking, but when you look at the profits and cash flow, you can get from implementing something like this you start to see the amazing hidden potential of commercial.

It’s fantastic that councils are allowing developers to build more dwellings onto residential house blocks but there’s not enough juice in it to convince me to abandon commercial…

Those guys have to fight and coerce and push council to let them do these deals, while I’ve got councils telling me that six-story apartments slotted in behind a single shop is exactly what they want in their area…

And there’s so much more money in it…

For me…

It’s a complete no-brainer.