It used to be cheaper here in regional Queensland, but the Queensland government introduced legislation designed to cap and reduce the costs of council fees and levies on development. What may have reduced costs in Brisbane resulted in higher costs here. That's just for council fees. They also have extra requirements like extending the bitumen on the road to the verge (most roads in established parts of town have a gravel verge) and previously also required the developer to construct a concrete footpath, although they have now relaxed this requirement.
I think the actual construction costs are cheaper here, but higher property prices in capital cities allow more value to be added by development.
Would you ever advise purchases conditional on council development approval (probably hard to get the vendor to agree to in a raging bull market)? Alternatively, would there be value in buying, then getting approval and on-selling with DA? The extra stamp duty would eat away at some of the profits from this strategy (stamp duty is such a dumb tax).
Yeah, when I lived in regional Victoria, we had similar issues with council wanting you to pay for a new curb in front of the house and even extend it down to a point that made it ridiculously expensive. Footpaths are also a pain.
It's always great when you can get a due diligence clause accepted, but you're right, it depends on the market. In Melbourne and Sydney, a lot of investors are on-selling properties with approved plans and permits, but in regional areas, the land isn't usually valuable enough to get a profit. And the stamp duty is definitely a pain. Makes it really hard to flip properties.