I would love to be able to say “Yes, definitely, you are sitting on a gold mine – get ready to cash in!” Sadly, it’s not as simple as that. There are two parts to this question:
- Will the council allow subdivision on this site?
- Is it worth subdividing my site?
The first question is easier to answer, but you need to know what the zoning is for your property and then find out what is permitted in that zone. In Auckland, for instance, you can subdivide in any area if you can create a 600m2 lot for your new section. In a ‘mixed housing suburban’ zone, you can almost always subdivide if you have a site 1,000m2 or larger.
Because the Unitary Plan has been set down but is not yet in force, knowing what you’ll be allowed to do with your site usually means asking an expert (we can help) or talking to the Council (they can help, but we’ll answer your questions a lot more quickly). You can look up your property’s zoning on the relevant district plan.
Just because your section’s the right size, doesn’t automatically mean it’s a great candidate for subdivision. It’s unusual to be able to subdivide for less than $100,000 in Auckland and that number can rapidly double or even triple depending on the cost of getting the right infrastructure to your property. Stormwater is often the major stumbling block; an expensive solution can quickly push a profitable subdivision into the red. Driveways can also be complicated, as can sewage connections and drainage. Add to that the holding costs and risks – you need a thorough understanding of what you’re signing up for.
When you read that property advertisement and see ‘subdividable’, it’s easy to get excited. Unfortunately we’ve been consulted many times by people who have bought large sections only to find the subdivision costs outweigh the potential benefits. It’s really important to ask an expert (or become an expert) before you buy a section because you plan to subdivide. Call us before you buy and we can help you navigate the choppy waters safely.
By Jen Gautier