Dual Occupancy Development Guide: Costs, Process and Profits

Dual occupancy development has emerged as one of the most profitable and accessible forms of property development in Australia. With recent planning reforms making it easier than ever to build two dwellings on a single block, property owners are discovering they can create substantial wealth without the complexity of larger developments.

But what exactly does it cost? How long does it take? And most importantly, what profits can you realistically expect? This comprehensive guide breaks down everything you need to know about dual occupancy development in Australia, from your first feasibility study to counting the profits at settlement.

What Is Dual Occupancy Development?

Dual occupancy refers to two dwellings on one lot of land. Unlike subdivisions that create separate titles, dual occupancy can exist on a single title (though subdivision is often possible and profitable). The types include:

Types of Dual Occupancy

Attached Dual Occupancy (Duplex)

• Two dwellings share a common wall
• Most cost-effective to build
• Suits narrower blocks
• Popular with investors and first-home buyers

Detached Dual Occupancy

• Two separate houses on one block
• Higher construction costs but better privacy
• Suits larger blocks
• Commands premium prices

Secondary Dwelling (Granny Flat)

• Smaller dwelling (usually 60-90sqm) behind main house
• Lower cost option
• Can be built without demolishing existing home
• Good for generating rental income

Recent Planning Changes Making Dual Occupancy Easier

As of July 2024 in NSW, dual occupancies are now permitted in R2 Low Density Residential zones where they were previously prohibited. This single change has made thousands of properties suddenly suitable for dual occupancy development. Similar reforms are rolling out across other states, making this the perfect time to consider dual occupancy.

Complete Cost Breakdown for Dual Occupancy Development

Understanding the true costs is crucial for assessing profitability. Here's a detailed breakdown based on current Australian market rates:

1. Pre-Development Costs

Development Application (DA) Costs

• Council DA fees: $2,000-$5,000
• Architect/Designer: $8,000-$20,000
• Town planner: $3,000-$8,000
• Engineering (civil, structural): $3,000-$6,000
• Surveyor: $2,000-$4,000
• Other consultants (traffic, acoustic, arborist): $2,000-$8,000
• Total Pre-Development: $20,000-$51,000

Complying Development Certificate (CDC) Route

• Private certifier: $3,000-$5,000
• Design and documentation: $10,000-$15,000
• Engineering: $2,000-$4,000
• Total CDC Route: $15,000-$24,000

2. Site Preparation Costs

Demolition and Clearing

• House demolition: $15,000-$25,000
• Asbestos removal (if present): $5,000-$15,000
• Tree removal: $500-$3,000 per tree
• Site clearing: $3,000-$8,000
• Total Site Prep: $23,500-$51,000

3. Construction Costs

Attached Dual Occupancy (Duplex)

• Construction rate: $1,800-$2,500 per sqm
• Typical size: 2 x 140sqm = 280sqm total
• Construction cost: $504,000-$700,000
• Site works and external: $50,000-$100,000
• Total Construction: $554,000-$800,000

Detached Dual Occupancy

• Construction rate: $2,000-$2,800 per sqm
• Typical size: 2 x 120sqm = 240sqm total
• Construction cost: $480,000-$672,000
• Site works and external: $80,000-$150,000
• Total Construction: $560,000-$822,000

4. Infrastructure and Contributions

Council Contributions

• Section 7.11/7.12 contributions: $20,000-$40,000 per dwelling
• Water/sewer connections: $10,000-$20,000
• Electricity connections: $5,000-$15,000
• Total Infrastructure: $55,000-$115,000

5. Professional and Finance Costs

During Construction

• Construction loan interest (12 months @ 7%): $30,000-$50,000
• Project management: $20,000-$40,000
• Certifier/inspections: $5,000-$10,000
• Insurance: $5,000-$10,000
• Total Professional/Finance: $60,000-$110,000

6. Sales and Marketing Costs

If Selling Both Properties

• Real estate agent commission (2.5%): $35,000-$50,000
• Marketing: $5,000-$10,000
• Legal/conveyancing: $3,000-$5,000
• Total Sales Costs: $43,000-$65,000

Total Project Costs Summary

Attached Dual Occupancy (Duplex)

• Low end: $735,500
• High end: $1,151,000
• Average: $943,250

Detached Dual Occupancy

• Low end: $741,500
• High end: $1,173,000
• Average: $957,250

The Dual Occupancy Development Process

Stage 1: Feasibility and Planning (2-3 months)

Month 1: Initial Assessment

• Confirm zoning permits dual occupancy
• Check minimum lot size requirements
• Analyse market demand and comparable sales
• Preliminary design concepts
• Financial feasibility modelling

Month 2-3: Design Development

• Engage architect/designer
• Develop detailed plans
• Coordinate consultant reports
• Pre-DA meeting with council
• Finalise development application

Stage 2: Approval Process (3-6 months)

DA Route (3-4 months typical)

• Lodge development application
• Council assessment and queries
• Potential design modifications
• Public notification period
• Determination and conditions

CDC Route (2-4 weeks)

• Submit to private certifier
• Quick assessment
• Issue of CDC
• Can commence construction immediately

Stage 3: Construction Phase (10-12 months)

Months 1-2: Site Establishment

• Demolition and clearing
• Services disconnection/protection
• Site setup and safety
• Foundation preparation

Months 3-8: Main Construction

• Slab and footings
• Frame and roof
• External walls and windows
• Internal fit-out
• Services installation

Months 9-10: Finishing

• Final finishes and fixtures
• Landscaping and driveways
• Defect identification
• Council inspections

Months 11-12: Completion

• Occupation certificate
• Final certifications
• Practical completion
• Marketing commencement (if selling)

Stage 4: Sales or Rental (1-3 months)

Sales Strategy Options

• Sell both off the plan (during construction)
• Sell on completion
• Sell one, keep one for rental
• Keep both as investment properties

Real Profit Examples and Case Studies

Case Study 1: Sydney Western Suburbs Duplex

Project Details:

• Location: Blacktown, NSW
• Original property: 700sqm block with old fibro house
• Purchase price: $850,000
• Development: Attached dual occupancy (2 x 140sqm)

Costs:

• Pre-development: $35,000
• Demolition: $20,000
• Construction: $650,000
• Infrastructure: $70,000
• Finance/professional: $85,000
• Total costs: $860,000

Returns:

• Sale price (each): $900,000
• Total sales: $1,800,000
• Less original land: $850,000
• Less development costs: $860,000
• Less sales costs: $45,000
• Net profit: $45,000
• ROI on costs: 5.2%

Note: While the profit seems modest, the landowner also gained $850,000 from their land value, making their total return $895,000.

Case Study 2: Melbourne Middle Ring

Project Details:

• Location: Glen Waverley, VIC
• Original property: 800sqm corner block
• Purchase price: $1,400,000
• Development: Detached dual occupancy with subdivision

Costs:

• Pre-development: $45,000
• Demolition: $25,000
• Construction: $750,000
• Infrastructure: $90,000
• Subdivision costs: $15,000
• Finance/professional: $95,000
• Total costs: $1,020,000

Returns:

• Sale price (front): $1,350,000
• Sale price (rear): $1,250,000
• Total sales: $2,600,000
• Less original land: $1,400,000
• Less development costs: $1,020,000
• Less sales costs: $65,000
• Net profit: $115,000
• ROI on costs: 11.3%

Case Study 3: Brisbane Growth Corridor

Project Details:

• Location: Coorparoo, QLD
• Original property: 600sqm regular block
• Purchase price: $780,000
• Development: Attached dual occupancy

Costs:

• Pre-development: $28,000
• Demolition: $18,000
• Construction: $520,000
• Infrastructure: $55,000
• Finance/professional: $70,000
• Total costs: $691,000

Returns:

• Sale price (each): $750,000
• Total sales: $1,500,000
• Less original land: $780,000
• Less development costs: $691,000
• Less sales costs: $37,500
• Net profit: -$8,500
• Break-even project

Lesson: Not every project generates profit. Thorough feasibility analysis is crucial.

Maximising Dual Occupancy Profits

Design for Your Market

Young Families

• 3+ bedrooms
• Separate living areas
• Good storage
• Secure yards
• Close to schools

Downsizers

• Single level preferred
• Low maintenance
• Quality finishes
• Security features
• Close to amenities

Investors

• Optimal size (not oversized)
• Durable materials
• Standard inclusions
• Good rental yield
• Low maintenance

Cost-Saving Strategies

Design Efficiency

• Mirror-image designs save architectural fees
• Standard material sizes reduce waste
• Simple roof designs cut costs
• Shared walls in duplexes save significantly

Smart Timing

• Build both dwellings simultaneously
• Winter construction can be cheaper
• Avoid Christmas/Easter delays
• Lock in prices early

Material Selection

• Balance quality with cost
• Standard colours often cheaper
• Bulk buying advantages
• Local supplier relationships

Revenue Maximisation

Subdivision Benefits

• Two separate titles worth more than one
• Easier to finance for buyers
• Can sell separately
• Better capital growth

Quality That Sells

• Street appeal crucial
• Perceived privacy between dwellings
• Good natural light
• Outdoor space for each dwelling

Common Dual Occupancy Mistakes to Avoid

Planning Mistakes

Underestimating Setbacks Many first-timers don't realise dual occupancy often requires larger setbacks than single homes, reducing buildable area.

Ignoring Easements Sewer and drainage easements can completely derail dual occupancy plans if not identified early.

Wrong Configuration Forcing dual occupancy on unsuitable blocks leads to poor designs that don't sell well.

Financial Mistakes

Underestimating Costs Budget blowouts are common. Always include 10-15% contingency.

Over-capitalising Building beyond market expectations kills profitability.

Poor Timing Starting construction without confirmed finance or in weak markets.

Design Mistakes

No Privacy Between Dwellings Buyers pay premiums for perceived privacy and independence.

Inadequate Parking Each dwelling typically needs 2 car spaces minimum.

Poor Solar Orientation Both dwellings need natural light and ventilation.

Is Dual Occupancy Right for Your Property?

Ideal Properties for Dual Occupancy

• 600sqm+ in most councils (450sqm in some)
• Regular rectangular shape
• 15m+ frontage preferred
• Relatively flat
• R2, R3, or R4 zoning
• Good location with amenities

When to Consider Alternatives

Larger blocks (1000sqm+): Consider townhouse development Prime locations: Apartments might yield better returns Existing house in good condition: Secondary dwelling without demolition Limited capital: Joint venture partnerships

The Partnership Advantage

While dual occupancy is simpler than larger developments, it still requires significant capital, expertise, and time. This is where development partnerships shine:

Benefits of Partnering with Developers

No Capital Required Professional developers fund all costs in exchange for profit share.

Expert Management From planning applications to construction management and sales.

Risk Mitigation Developers handle cost overruns and market risks.

Better Outcomes Professional design and construction typically achieve 10-20% higher sale prices.

Typical Partnership Returns

Instead of taking all the risk and funding requirements, landowners who partner typically receive:

• 40-50% of development profit
• No financial risk
• Completely passive involvement
• Professional outcome

On a project with $200,000 profit, that's $80,000-$100,000 return with zero risk or effort.

The Dual Occupancy Opportunity

Dual occupancy development represents one of the best risk-adjusted property development opportunities in Australia today. With recent planning reforms, growing housing demand, and relatively manageable project sizes, it's an ideal entry point into property development.

Success requires careful planning, realistic budgeting, and quality execution. While the profits can be substantial – typically $50,000-$200,000 per project – not every site works, and not every project makes money. Professional feasibility assessment is crucial.

For property owners with suitable sites, the choice between developing yourself or partnering with professionals often comes down to risk appetite, available capital, and desired involvement level. Both paths can lead to excellent outcomes when executed properly.

The key is taking action. With housing shortages driving demand and planning rules becoming more favourable, the opportunity for dual occupancy development has never been better. Whether you choose to develop independently or through partnership, the potential to transform a single house block into significant wealth is real and achievable.

Start with a professional assessment of your property's dual occupancy potential. The sooner you understand your options, the sooner you can begin capturing the value that may be hiding in your own backyard.