Property development feasibility, end to end

What a feasibility actually is

A property development feasibility answers a single question: does this project make money, and if so, how much? Everything else, the inputs you collect, the structure you build, the outputs you read, exists in service of that question.

A good feasibility is structured, defensible and quick to update. A bad one is a 47-tab spreadsheet that the analyst who built it has just left the company.

The inputs

Every residential feasibility relies on the same five input groups:

• Site, address, lot size, zoning, allowable GFA.
• Scheme, number of dwellings, mix, average size, car parks, levels.
• Revenue, per-unit pricing, selling costs, GST treatment.
• Costs, land, construction, fees, contributions, contingency.
• Finance, equity, debt, rates, drawdown profile.

Inputs are where most feasibility errors originate. Pricing pulled from comparable sales over three months old, construction rates from your last project two years ago, contributions from a schedule that's since been updated, each one quietly distorts the result.

The outputs that matter

The output set every Australian residential developer reads is the same:

• GRV, total revenue.
• TDC, total cost.
• Profit on cost, the headline ratio (target 18–22%).
• Development margin, profit divided by revenue (target 15–20%).
• Equity IRR, annualised return on equity.
• Peak debt and peak equity, read off the cashflow.

If your model can't produce all six on demand, it's not finished.

Scenarios and sensitivities

A single number is a guess. A range is a feasibility. Run scenarios for the realistic upside and downside on revenue, cost and timing, and read all of them side by side. Sensitivities (±5% on revenue, ±100bps on rate, 3-month delay) tell you which lever the project is actually exposed to.

Common mistakes

1. GRV not net of selling costs and GST.
2. Construction rate from a different cycle.
3. Contingency forgotten or under-provided.
4. Annual cashflow only, peak debt under-stated.
5. DM fee inconsistently treated.
6. Sensitivities run only on revenue.