Formula
WhereNet realisation = GRV less selling costs and GST.
Why it matters
Development margin is the second most-quoted residential feasibility ratio after profit on cost. ICs and financiers look at both because they capture different things: margin tells you about pricing power, profit on cost tells you about capital efficiency.
Worked example
Waterloo scheme: profit = $2,087,000, net realisation = $26,200,000.
Development margin = $2,087,000 / $26,200,000 = 8.0%.
For build-to-sell apartments, most developers target 15–20% development margin alongside 18–22% profit on cost.
Related terms
Connected ideas in the glossary.
See it in action
Use this term in a real feasibility.
Questions
Frequently asked
Is development margin the same as profit margin?
Conceptually yes; both are profit divided by revenue. Development margin is the term used in property development; profit margin is the broader term.
Why use both development margin and profit on cost?
They measure different things. A project can hit 20% margin but only 12% profit on cost if it is capital-heavy. Both need to clear hurdles to be a real go.
See these numbers in your own feasibility.
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