How Can I Assess the Viability of a Development Site in Queensland?

Chris Doolan
Oct 6
7 min read

Queensland, with its diverse geography, burgeoning population centres, and unique regulatory framework, presents both immense opportunities and complex challenges for property developers. Successfully navigating this landscape hinges on one critical process: assessing the viability of a development site. This isn't a quick glance at a property listing; it's a deep, multi-faceted investigation that synthesises market demand, intricate planning laws, environmental considerations, and rigorous financial modelling.

In Queensland, understanding the nuances of the Planning Act 2016, local government planning schemes, and specific infrastructure charges can make or break a project. A robust viability assessment ensures that a development site can deliver a profitable, compliant, and marketable project, safeguarding your investment from unforeseen pitfalls and maximising its potential.

Let's delve into the systematic approach required to assess the viability of a development site in the Sunshine State.

Meet the Founder: Chris

My lifelong passion for construction led me to found CADDACorp after 25 years, driven by the joy of creating "homes." We embody excellence and collaboration, achieving industry awards. I empower my team and focus on client-centric, sustainable solutions for Australia's evolving market, aiming to redefine development. My visionary leadership, grounded by golf and family, ensures our clients' success.

Why Queensland Demands a Specialised Viability Assessment

While core development principles apply everywhere, Queensland has specific characteristics that necessitate a tailored approach to viability assessment:

The Planning Act 2016 and Local Planning Schemes: Queensland operates under the Planning Act 2016, which provides the overarching framework. However, its implementation is highly localised through Council Planning Schemes (e.g., Brisbane City Plan, Gold Coast City Plan, Sunshine Coast Planning Scheme). These schemes contain granular details on zoning, overlays, density, height, and specific assessment benchmarks that vary significantly by Local Government Area (LGA) and even within suburbs.
Infrastructure Charges (LGIPs): A major financial consideration unique to Queensland. Councils levy significant Infrastructure Charges (under their Local Government Infrastructure Plans, or LGIPs) on new development to fund trunk infrastructure (roads, water, sewer, stormwater, parks). These charges can run into millions of dollars and vary dramatically based on location, development type, and existing infrastructure credits.
Diverse Environmental Regulations: Queensland's unique ecosystems necessitate specific environmental assessments covering coastal hazards, bushfire risk, flood immunity, biodiversity (e.g., koala habitat in South East Queensland), and the prevalence of Acid Sulfate Soils in coastal areas.
Dynamic Market Dynamics: South East Queensland (SEQ) is a major growth engine, but regional markets like Cairns, Townsville, and Gladstone have distinct drivers and cycles. Understanding these local market nuances is critical.

Key Stages of Assessing Development Site Viability in Queensland

A comprehensive viability assessment for a Queensland development site typically involves the following systematic stages:

Stage 1: Market Research and Product Definition – Understanding Demand

Before even looking at a specific site, you must understand what the market needs and wants.

Demand Drivers: Investigate key drivers in your target Queensland region or LGA: population growth, employment growth, major infrastructure investments (e.g., Cross River Rail, new hospitals, regional port expansions), and demographic shifts (e.g., interstate migration, downsizer trends).
Target Demographics: Identify who your potential buyers or tenants are (families, young professionals, retirees, commercial businesses) and their specific needs, preferences, and price points.
Competitor Analysis: Conduct a detailed review of existing and pipeline developments in the area. What are they selling/leasing for? What features do they offer? What are their absorption rates? Identify market gaps or areas of oversupply.
Defining the Optimal Product: Based on market insights, define the most viable product type (e.g., boutique apartments, family-sized townhouses, industrial sheds), optimal sizes, layouts, amenity offerings, and finishes. This ensures your development will meet genuine market demand.

CADDACorp's Role: Our Feasibility Modelling process begins with robust market analysis, leveraging data and local insights to define a marketable product.

Stage 2: Site Suitability and Constraints – The Queensland Regulatory Deep Dive

This is where the site's physical attributes and the intricate Queensland regulatory framework are meticulously assessed.

A. Planning & Regulatory Assessment (QLD Focus) This is paramount in Queensland due to the granular nature of Council Planning Schemes.

Zoning & Permissible Uses: Identify the site's zone under the relevant Council Planning Scheme. Confirm that your proposed development type is a 'Consistent Use', 'Code Assessable', or 'Impact Assessable' use. Understanding this distinction under the Planning Act 2016 is crucial for approval pathways and timelines.
Density & Height Controls: Precisely identify the maximum dwelling density, site cover, and building height limits applicable to the site. These are often explicitly stated in planning scheme codes.
Overlays: Thoroughly examine all applicable overlays in the Planning Scheme, which layer additional requirements or restrictions. Common Queensland overlays include: Flood Hazard, Bushfire Hazard, Coastal Hazards, Biodiversity/Vegetation, Heritage, Airport Environs, and Character Overlays.
Infrastructure Designations: Check for any designated infrastructure (e.g., future roads, sewerage lines, parks) crossing or adjoining the site, which could impact development.
Pre-lodgement Meetings: Engage in pre-lodgement discussions with the relevant Queensland council. Many QLD councils have strong pre-lodgement processes that allow for early feedback on concepts, identification of key issues, and clarification of planning scheme interpretations.

CADDACorp's Role: Our Town Planning Consultancy specialises in Queensland planning law and local council planning schemes, providing expert analysis of a site's regulatory potential and constraints. We handle all pre-lodgement engagement.

B. Environmental Assessment (QLD Focus)

Contamination: Investigate past land uses and conduct searches on the DERM (Department of Environment and Resource Management) contaminated land register.
Acid Sulfate Soils (ASS): For coastal or low-lying areas, identify potential ASS. Excavation of ASS requires specific, costly management plans under Queensland's environmental regulations.
Stormwater Management: Understand requirements for on-site detention (OSD) and Water Sensitive Urban Design (WSUD) principles.
Ecology: Specific flora/fauna assessments might be needed, particularly for koala habitat areas in South East Queensland.

C. Geotechnical & Physical Site Assessment

Soil & Rock Conditions: Conduct preliminary geotechnical investigations to understand soil bearing capacity and the presence of reactive clays (common in QLD).
Topography: Assess slopes, existing levels, and the need for significant earthworks.
Site Access & Frontage: Evaluate ease of access and sufficient street frontage for design and services.
Services Connection: Confirm proximity and capacity of essential services (water, sewer, electricity, gas, NBN) and estimate connection costs.

CADDACorp's Role: Our Site Acquisitions & Due Diligence service meticulously covers all these aspects, managing specialist consultants and integrating their findings into a holistic site assessment.

Stage 3: Cost Estimation – Quantifying the Investment (QLD Specifics)

This stage involves a comprehensive estimate of all costs associated with acquiring, developing, and selling the project.

Acquisition Costs: Purchase price, Queensland stamp duty, legal fees, and agent commissions.
Infrastructure Charges (LGIPs): Accurately calculate the council-levied infrastructure charges and any applicable credits.
Construction Costs: Detailed estimates informed by planning constraints and site conditions.
Professional Fees: All consultant and project management fees.
Financing Costs: Interest on acquisition and construction loans, facility fees, and bank fees. For a deeper understanding of financing options, you can reference our previous article, "What are the different types of development finance available? Building your Capital Stack for Success".
Holding Costs: Ongoing expenses during the development period.
Contingency: A crucial budget allocation (typically 10-15% of construction costs) for unforeseen issues.

CADDACorp's Role: Our Feasibility Modelling services, leveraging tools like Argus EstateMaster, are precisely designed to capture and meticulously project all these cost elements, especially the nuances of Queensland-specific charges.

Stage 4: Revenue Projections – Estimating the Return

Sales/Rental Rates: Project realistic sales prices per unit/lot or achievable rental income based on market research.
Absorption Rates: Estimate how quickly units/lots can be sold or leased.

CADDACorp's Role: Our Property Advisory expertise, combined with market research, provides realistic and defensible revenue projections.

Stage 5: Financial Modelling and Sensitivity Analysis – The Ultimate Test

This is the synthesis stage, where all data is integrated into a robust financial model to assess overall viability.

Key Financial Metrics: Calculate critical indicators such as Internal Rate of Return (IRR), Return on Investment (ROI), Gross Realisation Value (GRV), and Profit Margin.
Sensitivity Analysis: Stress-test the model against various scenarios (e.g., a 5-10% change in costs, sales, or interest rates) to reveal the project's resilience and key risk drivers.

CADDACorp's Role: Our core service is Feasibility Modelling, which rigorously processes all these inputs into dynamic financial models, providing clients with unparalleled insights into project viability and risk profiles.

Stage 6: Risk Assessment – Proactive Mitigation

Explicitly identify and document key risks for the specific Queensland site and propose mitigation strategies: Regulatory Risk, Market Risk, Construction Risk, Environmental Risk, and Financial Risk.

The Development Manager: Your Viability Assessment Partner in Queensland

Given the multi-faceted nature and Queensland-specific intricacies of viability assessment, the expertise of a Development Manager is indispensable. They act as your strategic partner, orchestrating the entire process.

Orchestration and Synthesis: The DM coordinates all specialist consultants and synthesises their complex findings into a cohesive, actionable viability assessment report.
Queensland Regulatory Acumen: Their deep understanding of Queensland's Planning Act 2016, specific Council Planning Schemes, and infrastructure charging regimes is critical for accurate assessment.
Holistic Risk Assessment: They identify how risks interrelate and impact overall project viability, proposing comprehensive mitigation strategies.
Strategic Design Integration: They ensure that the proposed Architectural & Urban Design is viable within the specific Queensland planning and environmental constraints.
Client Advocacy: The DM provides clear, unbiased advice, empowering the developer to make informed decisions.

CADDACorp's Integrated Expertise: Our core Feasibility Modelling service is directly complemented by our Town Planning Consultancy for detailed QLD regulatory analysis, Site Acquisitions & Due Diligence for initial site checks, and Property Advisory for broader strategic insights. This integrated approach provides a comprehensive and locally attuned viability assessment.

Building Queensland Success on Solid Ground

Assessing the viability of a development site in Queensland is a complex, yet absolutely essential, undertaking. It goes beyond a simple numbers game, demanding a thorough understanding of market dynamics, the nuances of Queensland's multi-layered planning laws, diverse environmental considerations, and rigorous financial projections. A comprehensive viability assessment is your blueprint for success, ensuring your project is not only financially sound but also compliant, marketable, and resilient to unforeseen challenges.

By meticulously evaluating every aspect of a potential site, you transform uncertainty into clarity, allowing you to confidently pursue opportunities in Queensland's vibrant property market. If you're considering a development project and seek to thoroughly assess its viability within Queensland's unique landscape, the CADDACorp team is ready to offer its specialised insights and assistance.