Browse Forums Building A New House Re: Builder is increasing the price 61May 31, 2022 6:30 pm I was trying to post an example budget but I couldn't upload the PDF. If anyone wants one to see how we price a typical 320sqm home just email me and I will shoot it over to you. My email is simeon@ashingtonhomes.com.au Cheers Simeon Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: Builder is increasing the price 62Jun 01, 2022 11:15 am Ashington Homes Infinite-Justice Ashington Homes That is an awesome idea, but just make sure you get some check pricing from builders in your area before you lodge your DA. That gives you time to value engineer if you need to I have priced 19 homes in the last 6 months that had DA and the clients couldnt afford to proceed with 17 of them Cheers Simeon How much per sqm on average are we talking about here? Quite surprising given I thought you are on the more competitive side of the pricing? It varies a lot. We have had some where they had budgeted around $2000/sqm and had designed full brick and suspended concrete structures that were closer to $4,000/sqm. We had one the other day where the budget was $1000/sqm and it was a $3,000/sqm build. Another one recently budget was $2500 and it was close $6,000/sqm. It all depends on the design and specifications. Our builds are mainly costing between $2,800-$3,200/sqm although we did have one recently that came in around $3,500/sqm So we are now just working on homes where we can control the design from scratch and use our knowledge to value engineer and design something that fits with the client's budget. 18 months ago same builds would have been $2,000/sqm Interesting post. Particularly how pricing per sqm has changed so much over the past 18 months. Where do you see this going? Many people will have trouble justifying such build prices (I'm struggling with this now), rates rising will put additional people off building, add in material shortages easing albeit slowly. If build starts drop significantly do you see pricing to pull back closer to where they were previously. Interesting, the project builder we've been talking with claim they have no bottlenecks on supply, but Metricon probably said this to customers as well. Re: Builder is increasing the price 63Jun 01, 2022 12:20 pm AJ1111 Interesting post. Particularly how pricing per sqm has changed so much over the past 18 months. Where do you see this going? Many people will have trouble justifying such build prices (I'm struggling with this now), rates rising will put additional people off building, add in material shortages easing albeit slowly. If build starts drop significantly do you see pricing to pull back closer to where they were previously. Interesting, the project builder we've been talking with claim they have no bottlenecks on supply, but Metricon probably said this to customers as well. From my perspective there’s a few things to consider. At the base level, this is a supply/demand issue. SO you would assume as demand falls off, supply should improve and pricing of supplies would start to taper as competition heats up in a lower demand market for those supplies. Easy, right? Just hold of building….. Maybe. In a perfect world. The factors likely to complicate the simple formula above are numerous and complicated. As supply costs decrease and the “new normal” of higher prices remains, it will be hard for suppliers and builders who are selling less volume to justify cutting into increased margins to be competitive, especially after they’ve been starved of margin for so long.. That will take time and require volumes of sales to increase. Increases in volumes of sales is also complicated. If interest rates are increasing, wages aren’t growing, banks are tightening lending, then that will choke volumes coming from traditionally buoyant areas of the market. Vacancy in the rental market needs to improve as we start to accept immigration again and students and lack of vacancies leading to high rent will push the whole discussion to supply (again). There will likely be big focus on affordable housing, new land releases, infrastructure etc to support growth areas, leading to more sales volume to cope with demand. Once this picks up we may stat seeing more competition. Operative word being “may”. This could literally take years, at which point inflation will have eroded any actual benefit to the lower cost of supplies. People will need to get higher paying jobs, realise profits from selling assets like their existing homes etc rather than relying solely on borrowing more because it’s cheap. Overall I think if you are hoping to get a house from a builder at prices from the last two years, you’ve missed the boat. Building a house will remain relatively expensive. The value of building vs buying established will be a narrower value proposition for some time to come. That will require various interventions at the federal level to incentivise people to increase the supply by building. Expect first home owner grants to come back, larger than before, but don’t expect them to offset an comparative material increase in the cost of a house. Maybe other initiative will pop up too like the goivt stumping up the remaining 15% on a 20% deposit etc. More of this will occur. My view is, if you can build now, do so. But do your due diligence. You are highly unlikely to be paying less if you wait for any material change in the market. I have friends who pre covid had 150K deposit ready to buy established. The covid hit and they decided to wait for house prices to fall before jumping in. Look what happened. They didn’t fall. They grew so effing fast that that 150k is literally worth LESS than it was. My block appreciated in excess of that in the first 12 months of covid AND the base price on the same house I am building wqent up 55k. Even with a correction now, that 150k wont ever be worth what it was when covid hit. They would have made money if they jumped in in early 2020. So do your research, learn, read, ask questions, make a decision that’s inside your risk appetite, but don’t assume that it will be getting cheaper n a significant way. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 64Jun 14, 2022 7:36 am Ashington Homes Hi Everyone, I have been doing some deep thinking on this issue over the past few months as I live and breathe it every day and am around people in this sector, and quite frankly, I can't picture how the volume building sector is going to get out of this mess in the short of even medium term. This sector is based on who can build the cheapest home with as many sparkly things in their display villages. The whole sector is operating at an unsustainable loss and really hasn't been making any meaningful profits since the 90's. With everything going on in the media and interest rate rises, I know for a fact that many companies are experiencing really low home sales at the moment. This means low deposits and cashflow issues. The machine is not getting fed and the spiral is getting worse. Someone needs to be first and brave enough to start raising their prices to a sustainable level so others can follow. It is impossible to expect a builder who is still signing contracts at $1500-1800/sqm to actually finish your home without a risk of either going broke mid build or hitting you up for a big variation. I know for a fact that several of the builders who people often refer to in this forum are struggling badly, so everyone, just be careful before handing cash over. To those who are in a contract and their builder asks for a variation to finish, before you go all legal, just think about how much more it is going to cost you if your builder goes broke mid build. I have lived through it and it is a nightmare. So make a rational economic decision even though your builder may have not right to that variation. It is survival of the fittest at the moment. Anyway, that is my 2cents Cheers Simeon Hi Simeon, I am in the same situation as the poster and mine is worse off as there had been zero communication from the builder. He basically abandoned the build mid build and do bits and pieces when I ask for information or going legal. Not sure what my options are here. Re: Builder is increasing the price 65Nov 12, 2022 8:49 am Now One of my friend build a house in NSW. Contract was fixed and was signed last year. The construction started early last year in (2021). The invoices were raised and the payments have gone through the bank as well. The construction was delayed due to COVID and rain was suppose to finish end of last year. Now at the finishing stage builder put up the price by 35% advising he is passing the cost. Under stress my friend Agreed to pay as he didn’t wanted to work to stop. All the bank payments has been paid, and he paid for variances. finally after so much of delay house was handed over and friend moved in. House has several defects that need to be fixed. builder is demanding for more money and sending more invoices than what was agreed to during the increase My question is, is this possible? I understand that there is price increase off late but for us the building materials were all ordered last year the invoices raised and paid. My friend have paid everything almost 20% more than contracted price. There were few variance which he agreed to The contract favours the builders a lot and if he go and handle this legally it is going to be a long process. Can you please pour in your insights on this. Thanks Re: Builder is increasing the price 66Nov 12, 2022 9:11 am I would say the new NSW building Bill can't come quick enough (humour) Proposed reforms to NSW building laws You better hurry feedback is closing soon, 25 Nov. 2022 Cheers Chris Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Hi Mofflepop, I would recommend finding a building designer to prepare plans, they should design to your specified budget. The benefit is you can tender the project out… 9 21281 Wow I hadn't realised things had gotten that pricey in just a couple of years since I built, that is crazy with how much land is now costing if you aren't lucky enough to… 3 7577 |