Purchasing development property well comes down to disciplined sequencing: run a feasibility and residual land value before offering, structure the offer with due-diligence and DA-related conditions, verify zoning, FSR and Section 73 water servicing early, and negotiate on terms (settlement period, deposit, conditions) as much as price. Development land rewards process discipline more than any other property purchase.
9 min read | Property Development | Last reviewed June 2026
Buying a development site is the highest-stakes property purchase, where a single overlooked factor can erode the entire project margin. These practical tips focus on the purchasing process specifically: how to structure the offer, sequence due diligence, and negotiate the terms that protect you on development land.
Tip 1: Feasibility before offer
Never offer on a development site without a feasibility and residual land value calculation. The RLV (gross realisation minus all delivery costs, finance and developer margin) tells you the maximum you can pay and still earn an adequate return. An offer made without this is a guess, and development land is unforgiving of guesses.
The most common and costly development land mistake is paying too much because the feasibility was optimistic or skipped entirely. The discipline of running a conservative RLV before offering is the single most protective habit in development purchasing.
Tip 2: Structure the offer with conditions
Development land offers should be structured to protect you during due diligence. Common conditional clauses:
- Subject to satisfactory due diligence (a defined period to investigate)
- Subject to DA approval (where the timeline allows)
- Subject to finance
- Extended settlement to allow planning work to progress
- Option agreements for longer planning runways
The right conditions transfer risk off you during the period when the most can go wrong.
Tip 3: Sequence due diligence
Due diligence on development land should be sequenced cheapest-and-most-likely-to-kill-the-deal first:
- First: zoning and FSR (desktop, fast, can kill the deal)
- Second: Section 73 water servicing and other servicing capacity
- Third: contamination (Phase 1 environmental)
- Fourth: title, easements, Section 88B instruments
- Fifth: detailed feasibility refinement with QS input
Sequencing this way means you spend the least money on the checks most likely to end the deal.
Tip 4: Verify Section 73 early
Section 73 of the Sydney Water Act 1994 requires a Compliance Certificate before development connecting to Sydney Water infrastructure. Where the existing mains are inadequate, the developer funds the upgrade, which can be a multi-million-dollar swing in feasibility. Engaging a Water Servicing Coordinator at the due-diligence stage, before committing, is the most reliable way to size this risk. Section 73 is the single most common cause of program slippage and unbudgeted cost on NSW development sites.
Tip 5: Negotiate terms, not just price
On development land, the terms often matter as much as the headline price:
| Term | Why it matters |
|---|---|
| Settlement period | Longer settlement allows DA work pre-completion |
| Deposit structure | Lower or staged deposit preserves capital |
| Conditions | DA or DD conditions transfer risk off you |
| Option agreements | Control the site while de-risking planning |
Tip 6: Build the right team first
Before purchasing development land, assemble the team that will assess and deliver it: a town planner (zoning, yield, DA), a quantity surveyor (cost plan, feasibility), a development-experienced property lawyer (contract, conditions, options), and a finance specialist (capital structure). The team’s input during due diligence is what turns a risky purchase into a calculated one.
Frequently asked questions
Run a feasibility and residual land value (RLV) calculation: gross realisation minus all delivery costs, finance and developer margin. The RLV tells you the maximum you can pay and still earn an adequate return. Never offer on development land without it, because the most common costly mistake is overpaying on an optimistic or skipped feasibility.
Structure it with conditions that protect you during due diligence: subject to satisfactory due diligence, subject to DA approval where timelines allow, subject to finance, extended settlement to progress planning, or an option agreement for a longer planning runway. The right conditions transfer risk off you during the period when the most can go wrong.
Sequence cheapest-and-most-likely-to-kill-the-deal first: zoning and FSR (desktop, fast), then Section 73 water servicing, then contamination (Phase 1 environmental), then title and easements, then detailed feasibility with QS input. This spends the least money on the checks most likely to end the deal.
Section 73 of the Sydney Water Act 1994 requires a Compliance Certificate before development connecting to Sydney Water infrastructure. Where existing mains are inadequate, the developer funds the upgrade, a potential multi-million-dollar feasibility swing. It is the most common cause of program slippage and unbudgeted cost on NSW sites, so verify it early via a Water Servicing Coordinator.
Both, but terms often matter as much as price. A longer settlement allows DA work before completion, a lower or staged deposit preserves capital, DA or due-diligence conditions transfer risk off you, and option agreements let you control the site while de-risking planning. Strong negotiators use terms as much as price.
Assemble the team before purchasing: a town planner (zoning, yield, DA), a quantity surveyor (cost plan, feasibility), a development-experienced property lawyer (contract, conditions, options), and a finance specialist (capital structure). Their due-diligence input turns a risky purchase into a calculated one.
Yes. Billbergia’s acquisitions team is active across Sydney and Brisbane, acquiring development sites directly and through joint ventures with landowners. For off-market opportunities, JV and landowner partnership enquiries, contact Billbergia through billbergia.com.au.
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Information current as of June 2026. Sources: NSW Planning Portal, Sydney Water, Australian Property Institute, and Billbergia project documentation. General industry commentary, not legal, financial or investment advice. Independent professional advice should be sought before any development site acquisition.
