Browse Forums Building A New House 1 Aug 20, 2011 5:43 pm Hi there, We have noticed the base price of a certain major Builder's spec home over the past 6 months come down (quietly) by 35k. This is the "base price" so we are comparing apples with apples. So, what is everyone's thoughts? We haven't locked in any contract yet for our block of land and are tempted to sit on our hands for the next 6 months and see if prices come down further - we are on the brink of a recession in Australia with major global turmoil going on. Of course, Sales people tell us the usual story, oh no prices wont come down, the price is the price (they will spin you anything to get their commission). You don't need an Economics degree to know that when demand drops, price comes down. Tradies need to reduce their costs if they want to work, or they can sit at home and have coffee. Has anyone else noticed prices dropping with these big builders? More price drops to come? Building costs going down 2Aug 20, 2011 6:33 pm Hi Vesper79, I like your thinking! But, I wouldn't take that approach The way most builders work is as follows. They have a base house price, which, for all intents and purposes, is 4 walls and a roof. Then they add on their promotion... "Pay $2000 and get $60,000 worth of stuff". You and I both know that they aren't that generous! In this type of scenario, the 'base' price is inflated, as 99% of customers will take the promotion. On balance, you get your house (4 walls and roof) plus all the things you need thanks to the promotion - evaporative cooling, stone benches, flyscreens, floor coverings etc. All the builders will be competing on a promotion basis... "who's got the best stuff in their promotion? Who's offering the most for the least amount of money?" Then the guys in marketing go and mix things up and do a "price drop!" campaign... Maybe in response to the market (like we're seeing now), or just to break away from the other builders. But the prices don't just drop, and they're not eating into their margin. The base price will drop, and the scale of the promotion pack available will also drop... An example of this is with Porter Davis. At the start of the year, they had a promotion called Complete... Check it out here for their Prestige range of homes (http://kapconswc.blogspot.com/2011/04/p ... otion.html), then in April, they got rid of it, dropped their house's base price by $30k (under the Price Rewind campaign) and introduced the Simplicity promotion, which had a lot less included than Complete. Check Simplicity out here to see the difference (http://www.porterdavis.com.au/content/P ... licity.pdf). At the end of the day, regardless of the promotion and the base price, the cost to build the same spec home is consistent. The cost to build a home increases every few months by a thousand dollars or so, and I'd be fairly certain that trend will continue. Good luck! Re: Building costs going down 3Aug 20, 2011 8:42 pm Similar thing with h3nl3y. We looked at the lexington Q1 for $245000 - $30000 (discount) = $215000 Couple months later they put up there base price to $248900 - $30000 = $218900 Now they have a new promotion saying they have dropped the prices! $238900 - $20000 = $218900 All they do is play with numbers to make it sound like you are getting a discount or bonus. Re: Building costs going down 5Aug 21, 2011 12:11 pm ive looked at building my same house again and its 20k cheaper with better features. thats about 10%. builders arent getting the business as they did 2 years ago when kevin 07 bumped up the house grants Re: Building costs going down 6Aug 21, 2011 2:23 pm Agree that it's all a bit of a smokescreen but then PD do a $10,000 off dbl and $8,000 off single storey last weekend which appears to be genuine for those that can start building before 31st Dec. Things are getting a bit desperate for them JLD Re: Building costs going down 7Aug 21, 2011 2:46 pm It's a marketing ploy. I'm a new member here but have been reading this forum for past few month. I've been looking at display homes for a few months now and been keeping track of prices. Pd recently increased base price of their Darnley by about 8k. Last month it cost 199k for the darnley 26sq. Now it's 207 i think. So with that new discount of 8k you end up getting the same price as you did last month... Re: Building costs going down 8Aug 21, 2011 4:26 pm Thanks Investa, didn't know about prices before recently I was just ready to build and going to pay full price until the discount came up Weird that they haven't been advertising it though or maybe I've missed it? Re: Building costs going down 9Aug 21, 2011 7:31 pm investa It's a marketing ploy. I'm a new member here but have been reading this forum for past few month. I've been looking at display homes for a few months now and been keeping track of prices. Pd recently increased base price of their Darnley by about 8k. Last month it cost 199k for the darnley 26sq. Now it's 207 i think. So with that new discount of 8k you end up getting the same price as you did last month... Check out this site... http://www.accc.gov.au/content/index.ph ... mId/815334 Quote: Was–Now advertising Products or services advertised with a 'was'–'now' price claim should accurately reflect a comparison between the previous price ('was') and the current price ('now') being offered. Further, the actual previous price must have been offered for a reasonable period prior to the discount offer commencing so that it is a genuine offer and not just a price that has been inflated to make a sale price seem more attractive. For example, a retailer must not advertise a jacket for $85 ('now' price) discounted from $100 ('was' price), if that retailer does not normally sell the jacket for $100 or if the jacket has been offered at the higher price for only a short amount of time. "ECOECO" At 'EcoEco', we design windows, we design the best windows, we do it for you, so that when you’re happy we are happy. Tel. 1800 326 326 Re: Building costs going down 10Aug 21, 2011 7:45 pm As everyone has mentioned, it's often just marketing to make you think that you're getting a great deal. Suppliers and trades certainly haven't dropped their rates, and many builders wouldn't reduce their profit by $35k on one house. It is often made up somewhere else, especially in any post contract things you add, like at prestart. On the other hand, some builders have dropped their house prices lately, just because some builders in the industry are really quiet, and it's just to keep business ticking over. Industry talk is that some builders are even tendering to not make any profit at all, just to keep their build figures up. Do your research very well, because I don't know about the eastern states, but over here in the west several builders have just gone under, some others look likely to soon, and a lot of others are making lots of staff redundant. You don't want to sign up with a "cheap" builder only to find that they go bust in 6 months time. Also, it's guaranteed that the carbon tax will increase house prices once it all starts kicking in - the suppliers are already giving builders a heads up that as soon as their costs increase, it will be passed onto the builder - and therefore passed on to the customer. That may not happen for another year, but bear that in mind if you are holding off on signing a contract. Re: Building costs going down 11Aug 22, 2011 12:11 pm As all the other has said the builders are generally in the business of trying to entice people to jump on board. As an example, I am building with Clare... They are pretty big. I haven't seen the recent figures but all figures I have seen previously are upwards trending. At the end of the day the bare minimum tradie prices would go up by CPI. They'd be charged that so they'd pass that on. They are huge and hence they crunch the numbers well. What they do is they get rebates and incentives from companies like Miele, Smeg, Caesarstone etc. They have massive buying power. Re: Building costs going down 12Aug 22, 2011 5:07 pm rjg At the end of the day the bare minimum tradie prices would go up by CPI. They'd be charged that so they'd pass that on. But if we get a major recession tradies earning $1000 a day wil soon drop down to $500 or less Re: Building costs going down 13Aug 22, 2011 7:02 pm Tradesmen can't just increase their price by CPI when there is no work. If there is a recession they will be lowering their prices (not increasing them) as there will be more tradesmen around than jobs to fill! Building costs going down 14Aug 22, 2011 7:16 pm CPI increases are generally related to people on award wages, as a way of ensuring that their income covers inflationary cost of living rises. Trades don't put up their prices by CPI as such, it is their incremental price rises that feed into CPI figures... and there is plenty of work for trades, all around the country. If you truly believe we are headed for recession, then there is a significant risk of job losses, so I wouldn't consider a tradie knocking the top off their labour margin to make building a house a safe option - I'd be more worried about keeping a job to continue servicing the mortgage... Re: Building costs going down 15Aug 22, 2011 8:12 pm Two months ago we missed out on a really good deal at PD due to not being ready financially. They had the Darnely for 199K with simpplicity plus, 10K site cost, carpet + flooring and winter warmer special which includes insulation to walls and solar panels. Havnt been back since so has anyone been to PD lately and found some good promos packages they are providing? They dont seem to advertise evertyhing on the site. We only found out about the winter warmer when we were at their office. Re: Building costs going down 16Aug 22, 2011 8:53 pm We signed in November last year and I have noticed the same house as our, the base price has actually rise twice and is now about $30-40k more. So I think it depends on your location and builder Re: Building costs going down 17Aug 23, 2011 8:20 pm investa Two months ago we missed out on a really good deal at PD due to not being ready financially. They had the Darnely for 199K with simpplicity plus, 10K site cost, carpet + flooring and winter warmer special which includes insulation to walls and solar panels. Havnt been back since so has anyone been to PD lately and found some good promos packages they are providing? They dont seem to advertise evertyhing on the site. We only found out about the winter warmer when we were at their office. We just put in deposit for darnley 29 on the weekend. Locked in to 211k base price which includes style republic promotion + home theatre bonus (claimed to be worth of 6k) + another 5k off. We thought this isn't too bad and should cover at least 10k increase in base price from few months ago. I'm not sure if PD had been giving 8k off their base price last month. I thought its always been 5k off. The complete promotion was probably their best offer this year which obviously we missed out on that one Re: Building costs going down 18Aug 23, 2011 9:12 pm Nice deal there. The Darnley we got quoted was for the 26sq version so seems like you got a good deal. At the moment Henley has some good deals and they offer fixed price site cost so we are kind of swaying towards them but see what PD comes back with! We should be ready to put down a depost in few weeks. P.S Nice choice of house there Visine! I would never build with Fowler homes. I built with them in 2021 and till date maintenance issues are pending. 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