What impact does a development application have when it comes time to sell your property?
Here are answers to some of the most common questions about how development applications work and whether they add significant value.
What is a development application?
A development application, or DA, is a formal request made to your council for their consent to make changes to your property.
These changes could include:
- Building and landscaping work, including constructing new buildings, extensions, demolitions and some renovations.
- Subdividing your block.
- Modifying the use of your land (e.g. transitioning from low to medium density residential use).
It’s important to note that DAs are approved for proposed work, but this work does not necessarily have to be scheduled at the time of your sale. You should also keep in mind that each council has its own application process, application costs and set of criteria against which they assess applications.
How much impact does a DA have on property value?
Having an approved DA in place when it comes time to sell doesn’t always mean a boost to your property’s value. Because many sellers in your suburb could have similar plans in place, a standard DA will usually only have a marginal impact on your sale.
At the same time, obtaining a DA for an architectural renovation that significantly improves the design of your property could push your sale into a higher price bracket.
Whether yours is a standard or more specific DA, your agent’s ability to communicate the benefits of the approved DA to potential buyers always matters in the lead-up to your sale.
How much do DAs cost?
The cost of your application will vary depending on where your property is and the type of development you plan to undertake. Remember that there’s also a cost in terms of time spent gathering the right plans, forms and other documentation for submission.
To make the right decision here, it’s useful to get professional advice on your property’s potential increase in value with an approved DA in place.
How long does approval take?
The time it takes to assess and approve your application will also depend on where your property is and the type of work you’re proposing. If you’re planning to sell within the next few months, it may not be worthwhile starting a new DA with the aim of increasing your potential sale price. Again, professional advice from your real estate agent can help you make the best decision.
The value of making sure your DA doesn’t lapse
Once your DA is approved, you have a period of five years during which you must commence work or your DA approval will lapse. If this happens, you previous DA can’t be promoted to a prospective buyer as additional value as there is no guarantee of a successful second application.
Commencing work only needs to involve a small action. Once your council has inspected and signed off on the start of work, your DA typically becomes ongoing and can never expire. This means your agent can promote the benefits of the DA whenever you decide it’s time to sell.
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