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Knockdown Rebuild Masterclass™
Property Buyers Masterclass™
Build a few townhouses, sell them, bank the margin. That playbook printed money for years. Now the cost to build a house in Australia has jumped while resale prices have barely moved, and the easy middle market has dried up. Here’s why develop and sell stalled, and what property development in 2026 rewards.
Hit play above to watch the full breakdown.
Why did the old develop and sell playbook work so well?
It worked because you could build cheaply and still sell at a healthy margin. A few years back, you could buy a flat block within 10km of Melbourne and build good townhouses. Avoid big errors, and you made money.
Demand for quality townhouses near the city was strong, and build costs were low. Gavin’s last project came in around $15,000 a square. A single storey dual occupancy in West Footscray cost about $500,000 to build. That margin sat right in the middle of the market.
Why doesn’t develop and sell work anymore?
Because build costs have jumped 50% to 100%, but resale prices have barely moved. That same West Footscray dual occupancy now costs about $1.5 million to build. A Newport corner site that once cost $930,000 is closer to $2 million today.
So these projects carry an extra million dollars in cost. Meanwhile, Melbourne resale prices have risen maybe 10%. That squeezes the old margin out completely. Eight interest rate rises also hit buyer affordability. In the middle ring suburbs, overcapitalising is now very easy.
What property development strategies still work in 2026?
Property development in 2026 still has two plays that stack up. The first is building new and holding long term. You buy land in growth areas like Geelong or the Mornington Peninsula.
You spend around a million on land and a million on the build, then hold for five years or more. High-income buyers use negative gearing in Australia and wait for capital growth. The second play targets blue-chip suburbs like Brighton East with a high-end or custom home.
Owner-occupiers chasing a trophy home still have cash to spend, and a family home avoids capital gains tax.
Are NDIS and rooming houses still worth it?
Yes, but only if your proeprty development due diligence is thorough and the location is right. NDIS property still makes money, and that need isn’t going away. There was a rush into it and some oversupply, so that’s now where careful operators find value.
Rooming houses have grown more popular too, and the new planning laws in Victoria, including the updated ResCode framework, can allow more dwellings on suitable sites. The catch is demand.
Get the location right, near activity centres, universities, or a train line, and the numbers can work.
Property development in 2026 isn’t dead, but the old develop and sell playbook isn’t coming back soon. Australia keeps falling short on new homes, and that shortage keeps pushing prices up. So stop forcing deals that no longer work.
Position yourself where the market is heading, hold quality stock, or build for buyers who can still pay.
