Big plans for Diggers Rest

With 2,000 homes currently in Diggers Rest, Investa's general manager Victoria, Paul O'Brien, gave Property Observer a look into how they intend to develop the community and bring an injection of properties onto the market.

The new house and land estate, Bloomdale (pictured below), has 3,500 lots proposed to be built with an approved precinct structure plan in place.

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"We've got 1,400 lots in that precinct structure plan and we're first off. We're running the start and most of the frontage is with us. The first stage we've done is the Eastern side," said O'Brien. 

Currently, the township needs to be larger.

"The township's not big enough, you need a population of around 10,000 to make it a decent township where you get the police and all the services you want to get. It has a fire brigade there, and good football ovals and a school, but you need the larger cachment to make it a community," he said.

Gesturing to the masterplan (see the images below) he explained that there are six lots left available from stages one and three, and that latest achievements include a deal with Woolworths who will set up on the site. Stage four is completely sold.

There is also a potential deal for a carpark in place.

"Basic land is $163,000 for traditional house block and you can have a townhouse in there for $130,000. You can produce a turnkey townhouse for $300,000," he said.

He runs the numbers quickly. Building cost will come in around $125,000, with an assumed $15,000 margin on the build either way. This, with the land cost of $130,000 for a townhouse, equates to $270,000. Add in an agent's commission fee of $5,000 and the builders are left with a $25,000 profit.While it's tight, he explains that the economy of scale helps keep the cost down for the consumer and the builder.

The reason for the location is that travel is based around the currently underutilised Calder Freeway. While there are bank-ups and congestions on other freeways, this one remains relatively easy to drive.

"You drive casually out, you drive through country, which is why we called it country connected," he said.

Current buyers are largely second and third home buyers, with some first time buyers and a handful of investors. Development around the area will be restricted for some time, he said."It's isolated as far as the growth of the cachment, Melton don't want to connect with Diggers Rest," said O'Brien.

This will assist in maintaining the lifestyle requirement.

"Often if you go to an estate you have to wait until the developer builds the [community infrastructure] and they're not going to do it until they can afford it. Here, it's mostly there, you're coming into an established community. They don't need to hope and pray the road is connected, because it already is."

In February next year, through to October, a display village will be in place. Some housing may be complete between March and July, with residents then starting to move in. When looking at the overall picture, it will take sometime for the area to be developed completely.

"It's about the rate of sale. With 1,400 lots, we'd like to do 14 per month. In theory, we could be out in ten years, but it's probably a 15 year project."

Their historic average, however, is eight sales a month. So it could take up to 17 years.