The magic question! How much will it cost to complete a new build? Well, a common shortfall for those trying to establish their dream home budget is actually not understanding how the build costs come to be. Unfortunately, $1 million is not what it used to be, and although we would all love to have a seven figure bank account, it is important to understand how certain factors can be overlooked resulting in a blown out budget.
Whilst Architects may be able to incorporate certain skills to squeeze the extra space from a budget, we are by no means magicians. Sure, we can throw a bunch of tricks into a design mix to make spaces feel larger, change the quality and feel, but the costs of building are something no-one can escape.
This article intends to educate those interested in doing a few number crunches at home and to inform the main affecting factors when considering your budget and build costs.
Project Cost or Construction Cost?
Probably the most common mistake that I come across, is people not allowing for the costs it takes to complete an entire project. There is a whole lot more to building a new house besides the construction itself, and this needs to be incorporated into the budget from day dot. These can include but are not limited to: Consultants (Engineers, Land Surveyor, Building Surveyor, Geotech, Energy Rater etc.) Town Planning, Permit Fees and of course, the Architects. So it is important to allow such inclusions, how much? Every project is different, but I’d say 20% is a good BALL PARK figure to allow for.
Don’t forget GST!
You would be surprised at how often this one is overlooked. GST may slip through the cracks as we often associate GST with small purchases, but with a project worth $1.5 million, that’s $150,000 in GST! An amount definitely worthy accounting for.
What are the main factors which affect building costs?
Size
A relatively obvious one out of the gate, but size DOES matter! Especially when it comes to budget concerns. A larger house will require more materials, more time which equates to more labour, and potentially require specialised materials (ie. Large glass panes or wall panels) which in turn will require specialised equipment to install such items. A larger space may also require larger services to actively condition the area and maintain thermal comfort.
Detail + Complexity.
Unique forms, bold statements, clever designs all result in some sort of increased level of detail and complexity. To create spaces such as these requires increased attention across the board from design to construction. Increased design time, increased involvement with engineers, increased time for structural manufacturing and assembling, you get the picture.
The more budget conscious you are, the more you may be required to restrain the building to ‘standard detailing’. Which essentially are details which are commonly used, which allows materials, skills + knowledge to be readily available and labour kept to a minimum.
Quality + Materials
Higher quality materials not only carry increased cost, but usually require attentive refining, which also affects labour costs. A high quality material insists on specialised finishing, detailing + craftsmanship, and should you already be investing in expensive, beautiful materials, the last thing you need is for those materials to be mishandled or installed in an incorrect manner. To squeeze more from a budget, I like to incorporate the featured materials in a splash like manner, offering exposure to the feature or material in intentional circumstances for maximum impact. This can often have a larger impact than just lining the entire room with the feature material.
Site Conditions
A big one! If you have ever had the pleasure of living next to or near a solid building site, you would have noticed just the sheer volume of cars, vans, trucks, wagons, trailers, cranes, diggers, bobcats, excavators, that all need to do their things on site. Include a critically sloped site with difficult access and immediately we have a bottleneck where time becomes the forefront factor. Throw in poor soil conditions, requiring extra deep foundations and additional engineering and the possibility of hitting rock while excavating; things can begin to blow out very quickly.
Timeframe
Generally speaking, a building on a tighter timeline than say a standard timeline will cost more. The main reason is it requires more resources, eyes and focus on that particular project. Architects + engineers requiring larger teams to produce the required documentation in time, construction teams requiring more man power and focus, which may require more expensive labour. A builder with a larger team who is happy to guarantee deadlines and finish dates will most certainly request a premium compared to a lonely chippy plodding away from day to day, who could take considerably longer.
Energy Efficiency
An important one for us! But with the world becoming more and more environmentally conscious, minimum building efficiency performance requirements are increasing (thank goodness), thus, so are the materials and involvement to achieve such results. The minimum energy rating in Victoria currently is 6 stars, however we like to aim somewhat higher than that where possible.
Ok, so what does it cost to build then?
Generally speaking, $3000 + GST per square metre is the lower end of the scale when talking Architect design houses. $3500 - $4500 + GST per square metre is generally the range majority of our clients tend to gravitate towards, as this range gives the best balance and fusion between a classy, polished result yet still manageable financially. $4500+ GST per square metre and above is the high end, where the final product is highly polished, resolved and only the best of materials and craftsmanship is involved.
Again, these figures are ‘Construction Costs’ NOT ‘Project Costs’! (Remember our little conversation earlier?)
Budget Calculation Example
· 300-square metre house at $3,500 + GST per square meter (350 x 3500) = $1,050,000 + GST.
· Site Conditions; A block with a significant slope and difficult access allow 10% of $1,050,000 (0.10 x 1,050,000) = $105,000 + GST.
· Landscaping, fencing + driveway: Allow 15% of $1,050,000 (0.15 x 1,050,000) = $157,500 + GST.
· Existing house demolition + site preparation: Allow $25,000 + GST.
· Budget Contingency: Allow 10% (0.10 x 1,050,000) = $105,000.
· Architects fees: Allow 12% (0.12 x 1,050,000) = $126,000 + GST.
· Other Consultants + Fees: Allow $25,000 + GST.
TOTAL BUDGET = $1,593,500.00 + GST = $1,752,850.00
Immediately, just from some quick number crunching above, we can see how a budget can be severely overestimated. It is extremely important that people are informed early on in the process to align their expectations and budgets, to ensure no uncomfortable surprises down the track. This is one of the reasons why I am a huge advocate of bringing a Builder on board early. It allows the Client, Architect and Builder to consistently bounce the progressing design off one another to ensure the project stays in check until completion.
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Email: architect@alexenglish.com.au
Phone: 0407 964 717
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