Residual land value

Development Feasibility

The static residual model AU developers and lenders use to screen a site. Enter your end sales, build cost, and target margin — see the maximum land price the deal can carry and the margin it actually returns.

Gross realisation (GRV)

Total expected sale value of completed stock, net of GST.

Construction cost

Builder's contract / hard cost.

Professional & soft costs

Design, council, QS, legal — as a % of construction.

Contingency

Of construction. Lenders expect 5%+ on most projects.

Finance costs

Interest, line and establishment fees over the project.

Selling & marketing

Agent commission and marketing — as a % of GRV.

Target profit margin

On development cost excluding land. Lenders look for 18–25%.

Maximum land price

$592,800

The most you can pay for the site and still hit your target margin.

Gross realisation$4,200,000

Less selling & marketing($126,000)

Net realisation$4,074,000

Construction($2,300,000)

Soft costs($276,000)

Contingency($115,000)

Finance costs($210,000)

Required profit($580,200)

Residual land value$592,800

Margin on total cost (at that land price)16.6%

On these inputs the project supports the land price above while delivering your target margin. Pressure-test sales evidence and build cost before you commit.

Assumptions & method

Static residual method — a single-point screen, not a cashflow feasibility.
Target profit is taken on development cost excluding land. Lenders sometimes measure margin on total cost (incl. land) — both figures are shown.
GST is assumed handled in your GRV (net of GST). Margin scheme vs full GST is deal-specific.
Indicative only. A funded feasibility requires QS-verified costs and independent sales evidence.

Beyond the numbers

A number is a starting point, not an answer

These tools model the mechanics. The decision depends on structure, timing and the specifics of your scenario — that's the conversation worth having.

Speak with Team Start with Charles A.I