Subdivision Costs & Timing

Costs

There are many variables in undertaking a subdivision and as a result costs can vary. They will also vary between districts and with the size of the subdivision and the type of land to subdivide. The main costs are generally but not limited to:

• Preparation of a detailed Resource Consent Application, including site plans and an Assessment of Environmental Effects.
• Negotiation with Council in relation to conditions of consent.
• Approval of the consent by Council, including detailed conditions.
• Design of access and service connections in accordance with the conditions of consent.
• Installation of services (power, water, wastewater and accessways).
• Council fees, including application and Development Impact Fees are significant.
• Specialist reports (engineers, planners, geotechnical, traffic design, etc.).
• Legal surveying and lodgement of data with Land Information New Zealand.

As a guideline for a straight forward subdivision creating one new title, you can expect to invest upwards of $100,000 excluding construction of services and any development contributions your local council may require. For multiple titles there is often a significant saving per title depending on the costs of servicing. 

Timing

As mentioned, the process is not for the faint-hearted as it is complex and highly regulated. So, it is a lengthy process that can take a year at least and sometimes much longer depending on Council, Specialist Consultant and Contractor availability, the size of the project and project management.

Useful Tip

A section price is often said to be made up of one-third land cost, one-third development costs and one-third profit and risk. Often, if you are subdividing carefully, the existing title will not devalue much, therefore leading to additional profit. As an example, if the sale price of a new title/section in your area is around $300,000 then you could expect that you could invest around $100,000 to produce it.