Today's topic is architects and designers having no regard to their client’s budgets.
Something happened yesterday that unfortunately I see all too often, and I thought it might be a good time to give some advice on how to correctly design and budget for your new home so you can actually afford to build it once you have approved plans.
Background:
A few years ago, prior to starting Ashington, some friends of my kids starting chatting to me at Saturday sport, knowing I was a builder they had gotten themselves in a predicament,
They had engaged an architect to design their dream home in Turramurra. They had been clear that their budget was $1.2m. They then spent close to $100,000 on fees, spent over a year getting their development approval only to find out that the build price after going out to tender was over $2.4m. Double their budget.
They couldn’t afford to build their home and had just wasted $100,000.
When we started Ashington, we decided that a fundamental principle of our business would be to make sure our clients can afford to build their home once we have completed the design. To do this we start with an open conversation about what our clients can afford and then we do our best to explain what they can realistically achieve for that budget, from size to finishes, and once we are on the same page we start the design process with regular price checks along the way to make sure we stick to the budget.
Now to yesterday:
A super nice forum member approached me and asked me to price his gorgeous new build. I was more than happy too.
As there is quite a few days work in pricing a home properly ( especially the more complex ones) I like to ask about the client’s budget upfront so I know whether or not we are on the right track.
What I do is a quick gross floor area (GFA) measurement and from experience I can quickly get a gauge as to the rough sqm rate that a build will fall into. For instance, a brick veneer slab on ground home of say 450sqm will most likely be around $3,000/sqm, add a pool another $100,000. If there is a basement add another $400-500,000. Double brick & concrete slab add another $400,000 etc
Now this forum member had done the right thing when planning the initial design, which was to get a rough estimate of what the rate/sqm should be, but the problem is ( and I see this all the time) is that when the architect had supplied the plans and put GFA number on the drawings they were the CDC areas not the built areas.
So for CDC or DA the GFA areas are substantially less than what needs to be constructed. In this case, there was a difference of 142sqm. The architect had labeled 588sqm on the plans and the actual area to be built was 730sqm.
So the client had multiplied the expected rate per sqm by the smaller area.
You would be amazed at how often this happens.
I have seen this probably more that 70 times over the last 4 years ( I stopped counting at 40)
Out of all of the client supplied drawings that have come to me I have honestly seen only 2 or 3 built as people are surprised by the actual building costs. This is after they have their designs approved.
For this reason I will mainly only work on our own designs as we can keep them to budget.
The crazy psychological thing that happens is when you explain to people that their design is way over their budget and make suggestions as to how to redesign it to be affordable, as they have spent so much time designing it and creating it and dreaming of living in it, they can’t let go of the dream and redesign it to actually work.
So what ends up happening is that they never build anything at all.
The other issue is that designers get carried away by specifying extremely expensive materials which look insanely great on the 3d renders but can not be afforded. A classic example of this is if your designer has covered your facade in Knotwood, this is going to be at least $70,000.
Another popular item we are seeing specified lately are slimline bricks. These cost anywhere from $10-15 each just to purchase and then at least $4-5 to lay. So with 40 per sqm so on a sqm rate you can be looking at between $600-800 compared to regular bricks at $260-300/sqm.
Now to the solutions:
- Find a good builder in your area and get an understanding of your building costs and what you can achieve before starting the design. Rates/sqm are a really good guide to help you plan. I know in my area a lightweight build with medium to high finishes will be $2800/sqm at the low end and $3,500/sqm at the high end. The bigger the home the lower the rate/sqm as a lot of the pricing that goes into a home are fixed. Check your local area first.
- Find a good designer that knows your local area and give them a good design brief that encompasses what you have learnt.
- As your design goes through key stages make sure you get a local builder to price it for you. Not only will you build a relationship with a builder, you will make sure that you are keeping your budget on track. This gives you a great opportunity to test your builder’s knowledge and willingness to work with you.
- Get a key understanding from your builder about how much they will charge for nicer features, like open staircases, or anything else you are dreaming of so you can decide whether they will fit into your budget.
- Develop and maintain a detailed spreadsheet of your costs ( I am happy to supply you with a template we use)
- MOST IMPORTANTLY - GET YOUR DESIGNER TO GIVE YOU THE CALCULATIONS FOR THE TOTAL GROSS FLOOR AREA IE ALL OUTSIDE WALLS. Alfrescos, voids and stairs voids need to be built as well.
I hope this helps everyone a little bit.
I am always available for advice if anyone wants to text me or call me.
Cheers
Simeon
Subbu
Brian
Ashington Homes
