What a Feasibility Study Costs, and Why You Probably Shouldn't Buy One Yet

A woman rang us last year having just been quoted a bit over eighteen thousand dollars for a feasibility study on a block in the Illawarra. Nice block. Genuinely had potential. The quote covered a planning report, a concept design, a quantity surveyor's cost plan and a market study, bundled by an outfit that ran seminars on the weekend.

The problem with the quote wasn't the number. Eighteen thousand for that scope is roughly what that scope costs. The problem was that three of the four pieces were being bought to answer a question the first piece would have answered on its own, and the first piece takes about a day.

That's the thing nobody says out loud about feasibility work. It isn't one product. It's four, they belong in a sequence, and each one exists to justify spending money on the next. Buy them out of order and you've paid for certainty about a project that was never going to happen.

The four things people call a feasibility

A desktop planning check is the first and by far the cheapest. Zone, height, floor space ratio, minimum lot size, the overlays on the planning certificate, title encumbrances, and an experienced guess at the yield the site will carry. No drawings. A town planner will do a written due diligence version for something in the low thousands; plenty of people, us included, will do the informal version free because it takes a couple of hours and it either opens a conversation or ends one honestly.

A concept yield study is an architect or urban designer actually testing whether the dwellings fit. This is where the desktop assumption meets setbacks, separation, solar access, deep soil, driveway grades and a basement ramp, and where a "six units, easy" site turns out to be a four. Expect a few thousand for a competent sketch scheme, more if you want something DA-presentable.

A cost plan is a quantity surveyor pricing the build off that concept. Not a builder's guess, not a rate per square metre off the internet — an elemental estimate you can put in front of a bank. Another few thousand at pre-DA level, and considerably more once there are real drawings to measure.

A full feasibility wraps those into the residual land value calculation with an end value from a valuer or agent, finance costs, contributions, professional fees, GST treatment and a sensitivity table. Once all four are in, you're at the number that woman was quoted, and by then you have something a lender or a joint venture partner will actually read.

Rough shape of it, and I'd treat these as the range of quotes we see rather than as researched market data: the desktop end is free to a couple of thousand, the middle two are a few thousand each, and the full package lands somewhere in the five-figure band depending on scale and how much the site is fighting you. Get three quotes. The spread is wide.

The sequence is the whole point

Each stage is there to kill the project cheaply, and the value of a stage is measured by what it saves you from spending next.

The desktop check kills maybe half of everything we look at, and it kills it for reasons that were knowable in an afternoon: a heritage item on the parcel, biodiversity values mapping, a sewer main through the buildable envelope, a covenant limiting the land to one dwelling, a flood planning level that eats the ground floor. None of those need a cost plan to be fatal.

The yield study kills a good share of what survives, because the difference between the floor space ratio on the map and the floor space ratio you can build is often large, particularly on narrow lots — the entire logic behind assembling a site with the neighbours. A scheme that loses two dwellings to geometry usually loses its margin with them.

The cost plan kills a few more, and in the current market it kills them more often than it used to.

Only the survivors deserve the full feasibility. Running it first, on a site that hasn't passed the earlier tests, buys you a beautifully formatted document about a project that isn't real.

Why the expensive one gets sold first

Because it's the profitable one, and because it's persuasive.

There's a genre of property education business in Australia whose actual product is the feasibility study, sold to people who came for the seminar. The report is thorough, it's bound, it has a sensitivity table, and it concludes that the project works. It concludes that reliably enough to be worth noticing. The end values are drawn from comparable sales chosen generously, the build cost is a rate rather than a measured estimate, the contingency is five per cent, and the holding period assumes a DA determined in the statutory timeframe with no submissions.

None of that is fraud. Every input is defensible in isolation. Stack the optimistic end of six defensible ranges and you get a margin that doesn't exist.

The tell is easy once you know it. Ask what the report assumes for the contingency, the holding period, and the sales rate — and then ask what the margin becomes if the build cost is ten per cent higher and settlement is six months later. A real feasibility already contains that table, because running the numbers in both directions is what the exercise is for. A sales document has to be asked, and often can't answer.

The other tell: who is paid if you proceed. A consultant on a fixed fee has no position on the outcome. An organisation that will also project-manage the build, or sell you the finance, or introduce the builder, has one.

When it's worth paying properly

Some situations justify the full package early rather than late, and I'd rather say so than pretend the cheap path always wins.

If you're going to a lender, you need the cost plan and the valuation, and no amount of desktop work substitutes. If you're contributing land into a joint venture, the feasibility is the document the split gets negotiated off, and being the party without one is an expensive place to negotiate from. If you're choosing between two genuinely different schemes — three townhouses versus a small flat building — the comparison needs both priced, and a cost plan on each is cheaper than choosing wrong. And if the site is large or unusual enough that the yield question isn't answerable by eye, the concept study stops being optional.

What doesn't justify it: finding out whether your block has development potential at all. That question has a free answer, and anyone charging four figures to tell you your zone is selling you something.

What we'd do with the same eighteen thousand

Spend nothing for the first fortnight. Pull the certificate, read the title, step through the layers on the NSW Planning Portal spatial viewer, and check the actual standards for your band against the department's summary of the key provisions rather than the headline numbers everyone quotes. If that comes back promising, buy the concept yield study — a few thousand, and it's the single highest-value document in the sequence because it converts an entitlement into a countable number of dwellings. Then the cost plan. Then, if the margin still looks real, the full feasibility, and by that point you'll be spending it on a project rather than on a maybe.

The block in the Illawarra, for what it's worth, was fine. Better than fine. She didn't need the eighteen thousand dollar report to establish that, and the money went into the concept design instead, which is where it belonged.

PropertyThrive runs the desktop stage for owners at no cost and no obligation — entitlement, overlays, an indicative yield and what a developer would realistically pay. If it doesn't stack up we'll tell you, and you'll have saved the fee. Book a free assessment and you'll have the numbers within 24 hours.