Land Subdivision
Finance

Creating a new allotment through a land subdivision is often considered less risky and more profitable than developing and selling land with houses and the project timeframes are a lot shorter. This gives a property developer two good options when it comes to creating value from land: subdivide and build, or create and sell new bare land allotments. No matter which scenario your client pursuing, Private Mortgages Australia can help.

Getting the right property development finance from traditional banks and other major lenders can be difficult, as they’re limited in what funding they can offer for undeveloped property and vacant land. This includes restrictions on what costs they can finance, leaving a developer with a potential funding shortfall.

There are a range of factors at play with land subdivision, aside from the need to raise finance for a development. This includes council approvals when building, entailing comprehensive planning permits and Statements of Compliance. These can take between 12 and 18 months to complete if the process runs smoothly.

The costs associated with land subdivision aren’t insignificant either. Plans, permits, consultant’s fees and application fees can total $40,000 for a simple backyard subdivision – let alone a complex multi-unit development. On top of this are costs for onsite works like drainage, electricity, fencing, water and driveways – which the borrower will need to cover whether they’re planning to build or sell undeveloped land.

This is why flexibility with funding is needed to allow for unexpected delays with permissions, site preparation costs and the sale process.

Private Mortgages Australia understands all the common pitfalls associated with land subdivision and will work with you to increase the return on investment for your borrower and deploy all our resources to ensure this happens in the shortest possible time.