ILLUSTRATIVE EXAMPLE
How a development cost change affects a feasibility estimate
An initial profit estimate is only as reliable as its cost and revenue assumptions. Testing a cost increase or sale-price reduction reveals how much headroom the assumed project has.
Published 2026-10-23 · LANDICATION · Educational content
Define the hypothetical base budget
No address, dwelling count or planning entitlement is assumed. This is an arithmetic illustration, not an exported LANDICATION report or a complete development appraisal. Actual projects need site-specific design, approval, tax, finance and delivery inputs.
| Assumed budget item | Amount |
|---|---|
| Land and acquisition costs combined | $900,000 |
| Construction | $900,000 |
| Other project costs, excluding finance and selling | $150,000 |
| Finance costs | $80,000 |
| Selling costs | $70,000 |
| Total cost | $2,100,000 |
| Sale proceeds assumption | $2,400,000 |
| Residual before unmodelled tax and costs | $300,000 |
Change one assumption at a time
The cost-increase scenario changes only construction by 10%. The proceeds scenario changes only sale proceeds by 5%. Finance, selling costs and all other entries are held fixed solely to isolate the effects; a real change in timing or price may change those costs too.
| Scenario | Total cost | Proceeds | Residual |
|---|---|---|---|
| Base assumptions | $2,100,000 | $2,400,000 | $300,000 |
| Construction +10% | $2,190,000 | $2,400,000 | $210,000 |
| Sale proceeds −5% | $2,100,000 | $2,280,000 | $180,000 |
| Both changes | $2,190,000 | $2,280,000 | $90,000 |
Use the development workspace for the next investigation
Open a supported property in Development Analysis, inspect its available information and adjust the supported budget or financing inputs before recalculating. Check the exact definitions in that report; this simplified table is not a claim that every line is a separate editable field or that its residual equals every product return metric.
Use SmartMap separately to inspect supported parcel and planning layers, then confirm current controls with the relevant authority. A profitable arithmetic scenario does not demonstrate approval, buildability, available funding or an achievable sale price.
- Get a site-specific construction scope and cost estimate.
- Check timing, contingency, funding and tax treatment with the appropriate advisers.
- Document which assumptions changed when comparing results.
Further checks
The official resources below can help you check current requirements. Links checked 2026-10-23.
- Planning Victoria: using VicPlan ↗
- Service NSW: search for planning information ↗
- LANDICATION data and calculation methods
Information is general and does not take account of your circumstances. Confirm current requirements, costs and site-specific issues with the responsible authority or appropriate adviser.
Continue with Development Analysis.
Review development costs, revenue assumptions and estimated returns.
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