Dual Occupancy Developments – Part 1

A dual occupancy development is a great way to start or expand your property portfolio.  There are plenty of properties on the market that make ideal dual occupancy development sites.

What is a “dual occ”?

A dual occupancy development, in Victoria at least, refers to the practice of building a second dwelling on land that already has an existing dwelling on it. The term has different meanings in other parts of Australia, but we won’t get into that right now.  The municipal authorities and planners generally are just as likely to refer to this type of development as medium density infill.

Dual occupancy developments have been going on for decades now, but the cost of land over more recent times has seen the practice becoming more common and perhaps more acceptable. We have even seen a couple of examples of “triple occupancies” in our office, whereby the original dwelling can be retained and the residual land used for two additional dwellings.

Dual Occupancy Developments

A history of the 50 x 150 block

Early on, housing was kept as close as possible to industry, so our inner suburbs are made up of many small allotments, commonly as narrow as 15’ (5m) often back to back as terraces. This type of subdivision would use up as little as 100m2 of land per dwelling.

After the Second World War, and improvements in personal and communal transport, the 50’ x 150’ block – the cornerstone of the Great Australian Dream – became the standard suburban allotment. The proliferation of these allotments throughout what were then the outer suburban reaches, has created a supply of land for infill development in suburbs now considered middle ring suburbs. Whereas a terrace subdivision might take up 100m2 of land, these suburban subdivisions were commonly around 675m2 of land per dwelling.

Sourcing properties specifically for dual occupancies

We have successfully obtained town planning permits for dual occupancy developments on lots much smaller than 675m2, however, a property of 600m2 or more, in a suburban context, is a good rule of thumb, allowing 300m2 per dwelling.

In many cases our clients already have the land and dwelling and are looking to develop a second dwelling and subdivide either for a one off gain, whereby they sell one dwelling or the other, or an ongoing income stream from the rental income from the second property.

It is also becoming quite common for proposals to be cross generational, or familial, where one member of the family will sell or gift land to another in order to build a second dwelling. With the cost of land in middle and inner suburbs continuing to rise, this practice is likely to become increasingly more common.

Conclusion

A dual occupancy development is the subdivision of an existing house and land into two allotments; one with the existing dwelling and one with a new dwelling.

Standard middle ring suburban allotments are often ideal for dual occupancy development.

Property can be sourced from the market, through family, or it may be right behind you.

Part 2 of Dual Occupancy Developments we will discuss some financial benefits of a dual occupancy development.