Hard and Soft Costs for Development in Melbourne

By Anna

When it comes to development costs in Melbourne, they generally fall into two categories: hard costs and soft costs. Hard costs cover the tangible aspects of construction such as materials, labor, and equipment. These expenses can vary significantly based on the project’s scope and overall quality. On the flip side, soft costs include various professional fees such as design services, permits, consultancy, marketing, legal fees, and financing costs. Industry specialists often point out that soft costs typically represent around 25-50% (or more) of the total development budget. Some experts in the industry suggested that for the architectural plans alone, it’s wise to budget about 10% of the overall build cost. Considering today’s market dynamics, it’s crucial to account for potential price increases. The total development cost can differ greatly depending on factors like project scale, location, and specific requirements. However, for a mid-range development, you might expect hard costs to range between AUD 2,000 and AUD 3,500 per square meter on a flat block.

Be mindful that mistakes in planning can substantially increase your property development budget. Issues such as incorrect permits, design miscalculations, inadequate planning, poor budgeting, or builder / supplier complications can lead to delays and unexpected costs. To navigate these challenges effectively, meticulous planning, budget management, consistent project oversight, and working with experienced professionals are vital. If you need assistance securing the right permits for your property, don’t hesitate to reach out to us at 1300 767 893.