Phone: 0408 671 524

As the population in our major cities continues to grow and with the centralisation of the workforce there is an increasing trend toward greater density of population and smaller households. What does this mean? It means where there used to be warehouses there are now blocks of apartments and where there used to be a single family home, now there are quite often two or more dwellings on the site.

If you are thinking of knocking down an old house and re-building multiple dwellings, there are a number of considerations that should be taken into account.


Where do I start?

It is important to get a few good people in your corner.

  • A property surveyor or town planning consultant should be able to guide you through the initial stages and help you navigate approvals and town planning
  • A good Mortgage Broker will be able to provide guidance on the best options to finance your project.
  • A reputable builder who has experience with this type of construction will help you avoid some pitfalls.
  • A Real Estate Agent with expertise in the local market will know what price your property can achieve

There will no doubt be some challenges (there nearly always is!) but it can be a worthwhile and profitable exercise if undertaken properly.


Size does matter

The size and dimension of a block will be a major determinant on what type of multi dwelling structure (if any) can be built on the block. Setbacks (how far back from the street a dwelling must be) as well as Easements (property clear ways) and Covenants (restrictions on use) must all be well understood. Council Planners will have guidelines on exactly what can and cannot be done on a particular block.

The location of driveways, height restrictions and limits on size per dwelling will all have a major impact on the viability of the project.


Do the economics stack up?

Some back of the envelope number crunching will be able to tell you whether or not what you are looking at is viable. Know your costs and build in a buffer. Do your research into what Townhouses and Units are selling for and it is essential to know what your land is worth.  A Real Estate Agent will be able to help you estimate the selling price for the property once it is built or you can engage the services of a Property Valuation service.  Winston Lo from Hot Spot Property agrees “There can be a great deal of value created with the right kind of build and the right location, but it can be a costly mistake if you don’t get it right.”


Quality considerations

Depending on whether you want to live in or sell a particular dwelling will influence the decisions you make in relation to the property fit out. If you have a passion for pink, then by all means fit out your pad in the shades that you desire, however if you are selling, then maybe neutral tones are a bit wiser.  Same theory applies for your choice of fittings, blinds, flooring and the like – generally steer away from the more divisive styles and stick with more popular ones, even if they aren’t necessarily to your own taste!


Standard build or custom designer?

Your budget and quality considerations will influence whether or not you engage an architect to plan and design the property of your dreams or select from designs that are already in existence. Builders such as Metricon and Porter Davis have options for builders which offer standardized designs and supporting service, however with minimal modifications at a relatively low cost compared to alternatives that are custom designed.  If you are targeting a higher end sale, then a more custom designed property with all the bells and whistles may be more what you’re after.


Is the Taxman going to be interested in this?

If you have previously lived in the property before knocking it down, part of your project may be exempt from Capital Gains Tax.  Narelle Pasavento from Prosper Advisory advises clients on these matters “There are a range of income tax, capital gains tax and GST issues that need to be considered when thinking about building/developing. In many circumstances some profits can be subject to income tax.   It is important to speak to an Accountant early as everyone’s circumstances are different.”


Getting approvals

Every council will have rules and regulations around what can and can’t be done with your knockdown and multiple dwelling. This includes building permits, demolition permits, dual occupancy permits and sub-division permits.  A building surveyor or planning consultant will be able to guide you through the process, or your builder if you have engaged one will be able to assist.


Will I be able to get Finance?

Unless you are in the fortunate position of not needing it, you will need to go through the process of obtaining finance for your build. Some lenders specialize in lending for these kinds of projects and your Mortgage Broker will be able to help you find the best lender and the best rate for your project.  The valuation for the project is key to determining the funding available and will depend on the value of the land, the cost of the build and the quality of the fittings used.



Interested in a knock down and build?

If you want to talk through options you can get in touch for a free, no obligation chat.  

Douglas Piening is a Mortgage and Finance Broker with Piening Financial Solutions and is passionate about providing advice you can trust. Whether it’s buying a home, refinancing a loan, investing, building or renovating, Doug brings a wealth of knowledge and expertise to assist with your lending needs.

You can contact Doug at or (m) 0408 671 524.

Want to hear what clients have said about working with Doug? Take a look at these reviews from LinkedIn and Facebook.

This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.