DOUBLE THE VALUE WITH A DUPLEX
As a starting point you might want to know what exactly is a duplex. It might seem obvious but a duplex is a type of dual occupancy development – basically two homes built on the same block of land that share a central wall.
Duplexes are sometimes on one title, meaning both halves must be sold together (ie dual key), or if a duplex is subdivided into two separate titles – either Strata or Torrens, each home can be sold separately.
If there was ever a great time to be looking to build a duplex it’s now and here’s why:
Also known as attached dual occupancy each residence is a completely separate home, with its own entrance, parking and yard. There’s an increasing demand for affordable housing across New South Wales and most especially in fast-growing regional areas such as Newcastle and the Hunter Valley.
The latest Department of Planning population projections show an additional 131,500 people living in the Hunter region by 2041.The Newcastle Local Housing Strategy also projects the population in the City of Newcastle to increase by around 41,000 people between 2016 and 2041, so they’re anticipating a demand for 19,450 new dwellings by 2041. With these sorts of increases, not everybody can expect to be living in a freestanding house on their own block of land.
In Newcastle, household sizes are expected to shrink over time as more people live alone or as a couple without children. Diversity is the key and that’s where the duplex builder slots right in!
Is a duplex a good investment?
Duplexes exist because they have such a great potential to make money. The cost to build a duplex is usually cheaper than building two houses, the build duration is less and because both dwellings are on the same block, the land costs less than two separate lots.
A duplex can be double or single story and there are a great variety of duplex designs to include any number of rooms. By researching the suburb in which you plan to build your investment property, you can determine whether the demand is for family homes, or smaller dwellings and build to meet that need. Duplexes have broad appeal being suitable for families, first time buyers with modest budgets or retirees looking for a low maintenance home.
Building a duplex creates equity and at the same time renting out either or both the properties gives you an ongoing high-interest return. A lot of duplex builders choose to live in one property and rent the other out thus benefitting from a regular income.
Whether you’re a developer or investor builder, the Hunter Valley is a great place to consider an investment property. According to the most recent report from NSW Government’s Annual Population Insights (Dec 2020) housing prices in regional NSW have risen by 3% since April 2020, outperforming those in Greater Sydney. There’s also a demand for more rental properties as increasing numbers of Sydney-siders, working from home due to the pandemic, are relocating to enjoy the benefits of regional living.
Two sides to every story
If building and investing in duplexes was simple then everyone would build them but there are numerous factors to consider regarding duplex build costs and regulations.
A duplex requires a large block of land. Blocks with existing approval can minimise the hassle, but generally cost more than a comparable site. If you decide to ‘knock down and rebuild’ on an existing property remember to add demolition fees to your budget.
Because you’re essentially building two houses the initial outlay is large. Some financial advisers suggest at least 20% deposit is necessary to build a duplex—a lower deposit would create a higher risk. It’s essential to develop a thorough financial strategy before building any investment property.
Everybody needs good neighbours…
If you decide to live in one unit your biggest concern will be your neighbours because you’re sharing a wall with them. This is fine if they’re the quiet retiring types but you really don’t have much control over how noisy they’ll be. If you’re renting out the other duplex ask yourself if you’ll feel comfortable being in such close proximity to your tenants?
Be aware that all local councils have different zoning rules so it’s worth doing some research on local Council laws. The Low Rise Housing Diversity Design Guide provides specifics on duplex designs and regulations. Or you may call the town planner at Council and ask for the zoning and if dual occupancies are permissible on your land.
We can make it easier
If you’re looking to invest in either the Hunter Valley or Newcastle, Valley Homes can provide a range of duplex plans and prices to match your budget and your block of land. The Valley Homes team even liaise with Council, manage all paperwork and applications including your Strata or Torrens title subdivision, coordinate all trade contractors and everything else in the tender to take the stress away for you and reduce the duplex build cost.
Take a look at our diverse range of fully customisable plans and get in touch to see how we can help you realise your ideal investment property.