Property Development Feasibility Calculator

Property development feasibility calculator

A development feasibility tells you, in one number, whether a deal makes sense. This calculator runs the full Australian development feasibility — every cost bucket, every revenue line, every finance assumption — and gives you the metrics that matter: margin on cost, return on equity, required equity, peak debt, break-even sale price per dwelling, residual land value. Pre-configured for a typical mid-scale NSW develop-to-sell project: 4 dwellings, $1.5M sale price each, $2.5M land. Adjust to your numbers; every figure is editable.

Lever	-10%	-5%	Base	+5%	+10%
Sale price	-30.3%	-26.8%	-23.3%	-19.8%	-16.4%
Build cost	-20%	-21.7%	-23.3%	-24.8%	-26.3%
Duration	-22.8%	-23%	-23.3%	-23.5%	-23.8%
Overrun buffer	-21.4%	-21.4%	-23.3%	-25.1%	-26.8%

Lever

-10%

-5%

Base

+5%

+10%

Sale price

-30.3%

-26.8%

-23.3%

-19.8%

-16.4%

Build cost

-20%

-21.7%

-23.3%

-24.8%

-26.3%

Duration

-22.8%

-23%

-23.3%

-23.5%

-23.8%

Overrun buffer

-21.4%

-23.3%

-25.1%

-26.8%

Rate	Quick (library)	Active value
Construction rate (AUD/m²)	$4,200/m²	$4,200/m²
Interest rate (decimal, e.g. 0.085)	9.5%	9.5%
Loan-to-cost ratio (decimal, e.g. 0.65)	65%	65%

Rate

Quick (library)

Your override

Active value

Construction rate (AUD/m²)

$4,200/m²

Interest rate (decimal, e.g. 0.085)

9.5%

Loan-to-cost ratio (decimal, e.g. 0.65)

65%

Bucket	Quick (derived)	Active value
Acquisition (land, stamp duty, legals)	$2,634,012	$2,634,012
Planning & design	$375,162	$375,162
Construction	$3,045,168	$3,045,168
Professional fees	$121,807	$121,807
Finance	$492,724	$492,724
Holding	$60,317	$60,317
Marketing & selling	$210,000	$210,000
Contingency	$375,214	$375,214
Taxes & duties	$318,182	$318,182
Total development cost (reconciled)	$7,632,584	$7,632,584

Bucket

Quick (derived)

Your override

Active value

Acquisition (land, stamp duty, legals)

$2,634,012

Planning & design

$375,162

Construction

$3,045,168

Professional fees

$121,807

Finance

$492,724

Holding

$60,317

Marketing & selling

$210,000

Contingency

$375,214

Taxes & duties

$318,182

Total development cost (reconciled)

$7,632,584

What a property development feasibility actually computes

Six core outputs. (1) Total Development Cost (TDC) = land + construction + soft costs + finance + holding + contingency. (2) Gross Realisation Value (GRV) = sum of dwelling sale prices net of GST adjustments. (3) Net Profit = GRV minus TDC minus selling costs. (4) Margin on Cost = Net Profit ÷ TDC. (5) Return on Equity (ROE) = Net Profit ÷ Required Equity. (6) Peak Debt = the highest point of debt during construction. Any feasibility tool that doesn't give you all six is incomplete.

The verdict bands — what 'feasible' actually means

Industry convention: 18–22% margin on cost is the baseline acceptable for a develop-to-sell project. Below 15% the deal doesn't pay for the risk. Above 25% the numbers are likely too optimistic somewhere — most commonly an inflated GRV or under-counted contingency. The calculator below puts the verdict band in plain English: feasible / marginal / not feasible / incomplete, with the precise number and the reasoning behind the band.

What to verify before relying on any feasibility number

(1) GRV — pull 6–12 months of comparable sales within 1km and within 15% size variance. Don't anchor on a single 'comp from down the road'. (2) Construction cost — get 2–3 fixed-price quotes from registered builders, not just $/m² estimates. (3) Council contributions — every NSW council publishes its Section 7.11/7.12 schedule; model the actual number, not a guess. (4) Finance — most early feasibilities use optimistic interest rates and LVRs. Anchor against your actual broker conversation. (5) Contingency — 7–10% on construction is the floor, not the ceiling.

Why margin on cost beats internal rate of return for early feasibility

IRR is theoretically pure but practically misleading at early-stage feasibility because the answer depends on the timing of cash flows, which you don't yet know precisely. Margin on cost is robust to timing — if it's 22% it's 22% whether the project takes 18 months or 24. Use margin on cost for early-stage feasibility (concept, site assessment). Switch to IRR once you have a credible draw schedule (post-DA, with builder contract in hand). The calculator below shows both.

Frequently asked questions

What is a good margin on cost for a property development?

Australian develop-to-sell convention: 18–22% margin on cost is the baseline. Below 15% the deal doesn't pay for the risk and effort. Above 25% the numbers are usually too optimistic — most commonly inflated GRV or under-counted contingency.

What is the difference between margin on cost and return on equity?

Margin on cost = net profit ÷ TDC. Return on equity = net profit ÷ equity you contributed. ROE includes the leverage effect — a 20% margin on cost with 70% debt finance becomes a 55%+ ROE. Both matter, but ROE is what your money earned.

How much contingency should I budget on a development?

7–10% on construction is the floor for established sites with builder-quoted construction. 12–15% for early-concept feasibilities where the construction number is rate-library-derived. Soft costs (consultants, council) should carry 5%+ contingency.

Should I use IRR or margin on cost?

Use margin on cost for early-stage feasibility (concept, site assessment) because it's robust to timing assumptions. Switch to IRR once you have a credible draw schedule (post-DA, post-builder-contract). The calculator below shows both.

What's the typical equity contribution required?

Established developers: 25–35% equity contribution (65–75% LTC finance). First-time developers: 40–50% equity (50–60% LTC). The calculator below shows the exact required equity based on your inputs.

Deal basics

NSW DBP Act 2020 applies — Class 2

What this deal is telling you

Not feasible at current inputs (-23.3% margin on cost)

Peak debt of $4,961,180 implies ~83% presales

Build rate $4,200/m² is 31% above the Sydney median for townhouse

Contingency at 4.8% is thin for an early-feasibility project

Here's how the numbers were built

Revenue

Construction cost

Acquisition

Soft costs, finance & contingency

The bottom line

What would change the answer

Cost breakdown

Scenarios — how resilient is this deal?

Sensitivity — which levers move the needle

Cash flow & finance

What scale does this site need?

Pro Mode — override anything (optional)

Underlying rates

Cost buckets

Construction BoQ — trade-level drill-down (optional)

Takeoff & assemblies — bottom-up line items (optional)

Catalogue

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What a property development feasibility actually computes

The verdict bands — what 'feasible' actually means

What to verify before relying on any feasibility number

Why margin on cost beats internal rate of return for early feasibility

Frequently asked questions

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