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April 22, 2022 by ash

Duplex: What is a duplex & are they a smart investment?

What does ‘duplex’ mean?

The meaning of a duplex essentially consists of two homes built on a single block where the two residences share a common wall but have separate, independent entranceways. For all practical purposes, each home in a duplex property is an independent entity though they may exist under a single roof. Both units could either share a common land title or have separate titles after subdivision.

Why duplexes?

Simply put, a duplex is a more affordable way to own a largely independent house, especially in an exclusive neighbourhood or a premium suburb. Given the runaway property prices in major urban areas across Australia, duplex homes like townhouses, make for an excellent investment for new home buyers as well as investors. A duplex delivers almost all the benefits of a detached house at about half the price, making it a sensible choice especially for home buyers on a budget, such as first home buyers who don’t have to compromise on the location. Property investors gain from a duplex’s two rental incomes instead of just one from a detached home. Even their initial investment for land and build costs will be lower for a duplex as it requires less land than two detached houses, and the land cost will be split between the two duplex homes.

Duplex homes also help homeowners unlock the hidden equity in their property by changing their single occupancy dwelling into a dual occupancy, with the second unit put up for sale or offered for rent most commonly found in Brisbane, Sydney and the Sunshine Coast. This is particularly ideal for retirees who would like to downsize without actually moving away from their familiar neighbourhood. A duplex is also a practical solution for the current trend of multi-generational families living under the same roof as it ensures privacy while providing the assurance and comfort of having one’s loved ones in close proximity, whilst also looking surreal, much alike a display home.

Types of duplex homes

Duplex designs are quite versatile, and depending on the size and dimensions of the block, can be side by side, top and bottom, or front and back. Duplexes are often double-storeyed but even three-storeyed designs can receive approval.

When designing a duplex home, it’s important to consider factors such as privacy, configuration, layout, natural light and aesthetics. A duplex doesn’t necessarily mean two identical units, similar in size, layout, facade, entrance and look. The dimensions of the lot will determine the placement of the two duplex homes.

Land title

The two units in a duplex development can either exist on a single land title, Torrens Title, or be subdivided into separate titles. In case of the latter, each individual home can be owned or sold separately. Subdivision of the title is a critical part of the planning and approval process, and will be subject to local council rules.

Better than an apartment, almost a detached house

A duplex allows the home buyer to consider exclusive neighbourhoods at a lower price. Homeowners living in a single dwelling house can redevelop their property into a duplex where they retain one unit for themselves and rent the other to generate income. Alternatively, they can subdivide the title and sell one dwelling to cover their construction cost. The upside is they can continue to live at the same address in a brand new home with some extra money in the bank from the sale of the second dwelling.

When evaluating their options, home buyers often compare duplex homes to apartments – it’s not a fair comparison. Apartments mean a lot more neighbours, shared facilities, no open spaces, pet rules, and limited opportunity to make any changes since it involves consulting with all the owners. On the other hand, a duplex will get you a single neighbour, open outdoor space, reasonable opportunity to make changes after consulting with the neighbour, flexibility to have pets without being governed by rules – almost all the advantages of living in a detached dwelling without paying the price for one.

Building a duplex

Developers specialising in duplex homes often recommend premium neighbourhoods for building duplexes. Build costs being the same everywhere, an exclusive location will be a key differentiator for buyers as it adds snob value to the property. Additionally, higher build quality and premium fittings will ensure good returns on the property.

The cost to build a duplex is typically just over a million dollars, with a build turnaround of 3-4 months. Ideally, the block planned for a duplex should be level and have street frontage for each dwelling. Local councils have different zoning rules but the block should optimally be about 600sqm though duplexes have been built on smaller properties. Larger blocks – about 700sqm or more – will provide more room for design flexibility and help create dwellings closer in space and design to a detached home.

New rules introduced in NSW in 2018 to promote housing affordability allow a duplex to be built on a 12-metre wide block as against 15-20 metres required earlier by councils. While developers still need to meet the minimum block size of 500-600sqm required by councils for a duplex, lots can even be 400sqm if the local council doesn’t specify a minimum, and Champion Homes is a common builder for these homes. 

The medium density housing code of 2018 in NSW also requires dual occupancy dwellings to have a minimum setback of 0.9 metres, with each dwelling to be 5 metres in width and a maximum height of 8.5 metres. Each dwelling must also face a public road. Blocks where the duplexes have dwellings placed one above the other must be at least 15 metres in width.

When compared to a detached, standalone house, living in a duplex home may mean less privacy and reduced availability of outdoor space. There’s also limited potential for changing the exteriors and adding value to the property unlike a detached house. However, at the end of the day, a well-designed duplex home in a good location is as good as a detached house – but at almost half the price!