Is Dual Occupancy Housing a Worthwhile Investment?

Investors and developers are constantly on the lookout for opportunity, with a variety of development options available to pique interest. This raises a question on dual occupancy housing - is it two for the price of one, or a pricey waste of time?  

Farnoud Erfanian Nozar

What is dual occupancy housing? 

Dual occupancy housing is defined as a development where two or more properties are built on one block of land. It may be a duplex where both properties are joined by a shared wall, or numerous units sharing the same block. These developments grab the interest of investors who want to maximise the value of their land, but it’s not always the walk in the park it’s made out to be. 

The pros 

Space efficiency: having multiple properties on one block is space efficient, especially if you’re aiming to develop three to five properties on a single block. This is useful, especially in inner cities. 

Perfect anywhere: whether it’s in the city or in a regional centre, everywhere needs housing – meaning you can develop dual occupancy housing pretty much anywhere.  

Council fees: since it’s a single property, you’ll only have to pay council fees for one block, saving you money over time. 

Cater to demand: during the ongoing housing affordability crisis, you’ll be catering to a growing demand for housing, especially among students and aging Australians. 

The cons 

Reselling: generally speaking, dual occupancy properties cannot be sold separately unless they are under separate strata titles. Therefore, resale demand on these properties is low, so you may have trouble finding a new owner should you choose to sell. 

Budgeting: some developers make the mistake of focusing on the profits to be made, underestimating the cost of the development itself. Therefore, many go over their initial budget to complete the project.  

Approval: dual occupancy projects require council approval. Each council has their own laws, so it’s essential for developers to know exactly what they’re getting into – it may be easier to obtain approval in some council areas than others.  

So, is it worth investing? Dual occupancy housing is a fantastic opportunity for the developer who is not faint-hearted. There is no one-size-fits-all approach, but with the right amount of care and planning, they can certainly be done profitably.