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Development margin calculator
Calculate development margin, profit divided by net realisation. The complement to profit on cost, focused on pricing power.
Formula
Development margin = (Net realisation − TDC) / Net realisation
Net realisation = GRV minus selling costs and GST.
Inputs
Net realisation
GRV minus selling costs and GST.
Total development cost
All-in cost: land, construction, fees, contributions, finance, contingency.
Output
Development margin (%)
Most build-to-sell apartments target 15–20% development margin alongside 18–22% profit on cost.
Worked example
Net realisation $26.2M, TDC $24.1M, profit $2.1M.
Development margin = $2,087,000 / $26,200,000 = 8.0%.
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