Properties with development applications approved selling for big bucks

SMART homeowners are making huge profits by doing very little with this trump card.

Take this derelict house in Camperdown, in Sydney’s inner west, as an example. Over the weekend, the dilapidated three-bedroom home sold for a whopping $1.96 million.

12 Sparkes Street Camperdown sold for $1.96 million under the hammer despite its dilapidated state. Picture: BresicWhitney

12 Sparkes Street Camperdown sold for $1.96 million under the hammer despite its dilapidated state. 

The vendor, who bought the property in July 2014 for $1.38 million, has walked away with a $580,000 profit windfall in under three years without doing anything. No renovations, no cosmetic makeovers, not even a lick of paint.

The property may still not be liveable — with decaying walls and caved in ceilings — but what it does now offer is a development application (DA) approved for a four-storey, 11 room boarding house for student accommodation at the at the rear of the 240 square metre block of land.

And being within walking distance to Sydney University, the new buyers are sitting on a cash cow — making its almost $2 million price tag a steal if they wanted to use the DA.

The terrace home is heritage listed but the property has a development application (DA) approved for a four-storey boarding house at its rear. Picture: BresicWhitney

The terrace home is heritage listed but the property has a development application (DA) approved for a four-storey boarding house at its rear. 

The late-19th-century terrace itself is heritage listed.

A DA is a formal request for consent to carry out development and must be approved by the local council. The reason for this is so the council can ensure that the proposed development doesn’t infringe on residential amenity or the environment, and that it preserves heritage.

The cost of a DA is set on a sliding scale based on the estimated cost of work. It can also vary between local councils. But it isn’t prohibitive and costs a lot less than undertaking renovations yourself.

According to the fees schedule for the Inner West Council, which includes Camperdown, a DA can cost from $110 for estimated works up to $5000, all the way up to $15,875 for estimated works more than $10 million.

However, minor building works can be exempt or come under a complying development. This means they either don’t require council approval or may be eligible for a fast tracked approval process.

The selling agent of 12 Sparkes Street Camperdown, James Peach of BresicWhitney, told news.com.au that the inner west market has obviously seen growth since 2014 but the DA “definitely” provided a boost.

The home was expected to sell for around $1.85 million but was snapped up for $110,000 over the asking price in just under four minutes.

Meanwhile, a converted pub in Redfern broke a price record after selling at auction over the weekend for $4.4 million. It also came with a DA to increase its floor space, or to add a studio, over the garage.

88 George Street Redfern broke a price record when it sold for $4.4 million over the weekend. Picture: BresicWhitney

88 George Street Redfern broke a price record when it sold for $4.4 million over the weekend. 

The former Imperial Hotel, which then became the Redfern Hotel in 1935, was converted into a five-bedroom, three-bathroom residential dwelling by the sellers.

The selling agent of 88 George Street, William Phillips of Bresic Whitney, said the size and uniqueness of the property was a large part of its appeal, but having a DA really sealed the deal for this record-breaking home.

“Buyers like the idea of being able to add value to a property,” Mr Phillips told news.com.au. “So having a DA is definitely another element of value in a sale.”

Having a DA approved takes the guesswork out and allows the new buyers to add value to the property. Picture: BresicWhitney

Having a DA approved takes the guesswork out and allows the new buyers to add value to the property. 

While the application cost of a DA might not be too prohibitive for the new buyers to get themselves, the process can be time-consuming and confusing, which is why DA approved properties can sell for big bucks.

“Buyers don’t look forward to the idea of dealing with the local council [to get a DA approved],” Mr Phillips said.

“There is also not much clarity around what the council will or will not approve so having a DA approved already on a property you’ve bought takes the guesswork out of it.”


Article by: Julia Corderoy / news.com.au
Image by: BresicWhitney

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