It is that time of year again. Builders are frantically trying to finish off projects. Owners trying to get them finished so they can take advantage of holidays to put on the finishing touches. You know the drill…
2014 has been a real turn around for both domestic and commercial builders. Demand is high for new homes so therefore you guessed it…the price to build goes up.
Although competitive pricing amongst the project home builders has seen them all jostling for their fair share of the action they have also realised that price increases are not turning away clients.
Clients are realising a market that is ‘Hot’ so they can see their investments growing. This is increasing equity in their property so therefore owners have a few options…sit and wait for prices to increase more then sell..or…use the equity in the property to build another investment property, adding even further to the already stretched workforce..or..sit back and relax, take a chill pill and just enjoy the fact that your new home is increasing in value. Remeber …Try to pay it off as quickly as possible.
2015 is going to see an increase in building costs. Conservative estimates are pegging it at about 3.5% more to build a home. Others are warning about 5%-7% increases in cost. Mightn’t sound like much but in real dollar value a house that cost $300k in 2013-14 will now cost $315k. (estimate based on 5%)
There are a few economic features that are driving the increase….
1) the falling Aussie dollar making imported goods more expensive
2) the increased demand for new homes is stretching the current work force. Builders can pick their projects and name their price (within reason).
Now for something you probably didn’t know! the last 7 years has seen a real slowing of the building industry. Apprentice numbers have dropped considerably. Training institutions have dropped courses in the building trades because of lack of numbers. Existing tradesmen have sought other types of non-building-industry work just to maintain a steady income.
As a result we are seeing an increase in unskilled workers entering the workforce and then ‘upskilling on the job’ without formal tertiary qualifications. This can lead to a decrease in quality of workmanship.
Unscrupulous builders are taking advantage of this situation by employing low skilled labour to perform tradesman jobs at a reduced price. Unfortunately you as the client will get the bill for the full price regardless of quality.
Luckily for you as a client using a licensed builder you are protected by your state laws which protects you against faulty workmanship or defective materials for 6 years after completion.
If you are an owner builder and you emply a tradesman without qualifications or a license then you are taking on a big risk.
Owner builders can save big bucks by managing the building process themselves. Follow a few simple rules and reap the rewards. Ignore the simple rules and then you will suffer big time…guaranteed.
Greenify Consulting helps owner builders stay in control of their project by providing everything they need including costs of labour, materials and schedules.
With the cost of building increasing in 2015 then wouldn’t you like to know how much you are going to be up for?
Contact Matt at Greenify Consulting for a free appraisal of your project.
Here is an excerpt form a current client. Food for thought!
After a horrendous experience with a local builder we demolished the slab he allowed to be laid at our expense and looked into building with a builder again. We were gun shy and learned that they can pretty much do what they want if they choose and get away with it to our detriment.
Our consideration of owner building came about because of this and as we were now severely financially compromised between losing our $15K deposit, demolition, legal fees and holding costs. (currently in the equally horrid process of NACT, so I can’t comment on specifics) We then realised that as some builders have little clue and no morals, we decided with help from someone like Matt at Greenify Consulting we could do this and likely do it better and cheaper….well that was the hope
and we have!!!!!!!!
The builder laid the slab start of Dec 2013 but it was not according to plan so we demolished under Council order in July 2014. We broke ground on the new owner build on the 16th of September and we are all locked up with gyrockers finished and the tiler about to start.
So far we have done better than the original builder by far and as a bonus we have a bigger house without technical problems like the old slab had as even the termite barrier would not have worked even laid according to plan! The best thing is we have saved around $150K (on new size tender prices from other builders) all up and by sourcing items ourselves and have been able to upgraded from the basic provided ranges to mid to high end items.
We have built according to the plans with no dramas and with the help of Matt explaining the technical issues and order of when to do what (our biggest no idea) and giving a guide to prices of we should expect to pay…. off we went!
We have had the help of some local builders and tradies who witnessed the previous disaster of an attempt to build and felt for us. Together with people like Matt who gave unconditional support (weekends and after hours at times – ie when we were home and able to do things) it has actually been quiet easy and not a scary as we thought!
There are some awesome honest tradies and people out there – it restores your faith in humans after something like this happens to you! My hubby has project managed the construction side and I have done the ordering and paperwork. We are still running our business at the same time although it is suffering from the lack of attention and we have had to outsourced work and accounting to ensure our customers are happy until hubby gets back to work full time.