Building cost in Melbourne (Innovative building solutions)

Hi everyone,

I know a land owner who has 13 small lots all next to each other in one of the estates in Melbourne, which he would like to sell. He bought them cheap in the early stages, got houses designed for all of them and now he's selling them for a profit. The buyer simply needs to find a builder to build them. He wants them sold in one go as he wants the money for his other project but it won't be a profitable development if a developer buy it as the margins will be quite low. I told him I could possibly package them up and sell them as house and land packages for him.

Although I've put together and sold many house and land packages before, the builders I work with build to their own designs and now I need someone who does custom built houses. All are single storey brick veneer designs.

The sizes are as follows:

150m2, 3 bed, 2 bath, single garage.
130m2, 3 bed, 2 bath, single garage.
110m2, 3 bed, 2 bath, single garage.
105m2, 3 bed, 2 bath, single garage.

1. I want to know how much would it roughly cost to build each for a turnkey built? A price per m2 would be good. Although $/m2 will not be entirely accurate, it will give me a good idea of how much I need to spend all up. Considering the builder will be building a lot of houses, I'm assuming there would also be some sort of a bulk discount.

2. Can anyone here recommend a builder who would be suitable for such a project. Especially if you have done similar projects yourself, particularly townhouses as these are quite similar to townhouses but detached.

3. What if I decided to get my own designs done. What sort of costs am I looking at for the whole design process? Basically everything this guy has done.

4. How long will it take to build these?

5. Because this is sort of like a joint venture, where the seller is providing the land and I'm developing and selling it, what do I need to do to make sure he doesnt back out half way or towards the end when I've invested time and money in to this project?

Do we need to have a contract and what kind of clauses will I need to include in it to protect my interests?

6. He also has another piece of land on which 3 detached homes can be built.

They are double storey brick veneer designs.

Sizes are as follows:

175m2, 3 bed, 2.5 bath, single garage
155m2, 3 bed, 2.5 bath, single garage

What sort of costs are we looking at to build each one? How long will these take to build?

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The single storey houses will be suitable for first home buyers and small families so my main aim is to keep it as affordable as possible without compromising on quality. I don't want them to take a long time to complete as that would mean more interest payments by the buyer during construction.

7. Are there any new ways of building houses that doesnt take 20-30 weeks to build and cost an arm and a leg and is of good quality?

I was looking at Home l InsulLiving: Australia's Insulated New Home Specialists | InsulLiving

8. It seems that building with these would be quicker but I can't find any information as to how quick. There are also no prices given. How much time and money would something like this save?

Has anyone built something using these or have seen one in person? From the photos the houses look a little cheap but it could be different when you see them in person.

Also maybe use these instead of brick?

Home

Exterior Insulation and Finishing System (EIFS) in Australia - RMAX

Home - CSR Hebel

9. Has anyone used it and have they saved time and money using them?

10. What about prefab/modular homes? How much do they normally cost?

11. I've read that it's difficult to finance them as they are all built in a factory and not in stages at the site so banks are not willing to give a loan until it's complete. Is that still the case or has things changed now?

12. Do you recommend big project builders who also do custom designs or small builders as they might want the work more and give better rates? Or will the rates be higher because they don't get the volume discount the big builders get on materials? I'm not sure if the big savings are in labour or material.

13. What if I get the builder to build everything except for flooring, kitchen and bathroom as I have a family friend who does all that. How will it affect the builders warranty and the progress payments? Will the bank be keen to lend if multiple people were involved instead of one builder?

14. What are the biggest costs when building a house especially as a percentage of total costs?

15. Can you get them to guarantee a particular build time? If yes, then what sort of penalties will they incur if they miss the cut off?

16. Will there need to be some sort of a contract between me and the builder or it's only between the builder and the purchaser?

I think these are all the questions I have for now but I'm sure I'll have more later on so I will ask them then. Thanks in advance for your answers and help.

 

This thread might be helpful.
Construction cost / sqm thread

There are two widely used industry calculators:

• Construction Cost Calculator & App | BMT Tax Depreciation
  
• Free Construction Cost Calculator | Washington Brown

Just be careful. These two calculators use slightly different assumptions.

 

I'm not sure why you want to do custom built?

If it's in Melbourne on an estate (so likely on the fringes), then why not use one of the big volume builders that build in these locations?

Prices are pretty transparent and very low per square metre.

They all do the sizes you quote, as they are used to building on estates, in brick veneer.

The other types of construction will cost a lot more at present as they are higher spec and volume builders ( actually most builders here) don't use them.

 

Thanks heaps. The first link is very helpful. I can see @sash has done many house and land packages so hopefully he will have some advice.

I know about the cost calculators but I wanted to know from those that have already built houses and how much it cost them as that would be a more accurate indicator of cost.

 

I looked at the websites of many project builders but very few of them said they do custom built. Two of have them have agreed to look in to it mainly because of the large size of the project. One also recommended townhouse style homes on it but I havent got a quote yet. The other gave a verbal quote of over $1300/m2 which doesnt leave room for any profit. But will get back to me next week with a written quote.

 

But is what you want actually 'custom built'?

Aren't you just putting up 13 small houses on separate blocks? What's 'custom' about that?

 

Build the designs I already have or give me a new design thats better than what I have. Their own designs dont fit the lots. They are from 6.5m to 8m lots.

 

Need some context:

1. Where do you wanto build North, NW, SW, SE Melbourne?
2. What level of specs - high ceilings, A/C, stone bench, downlight, fencing, landscaping, colored concrete driveway, etc?

As a general rule work on the following turnkey:

1. Homes under 125 sqm work on 12.5k per sq (9.28 sqm)
2. Homes 125-160m work on 11k per sq
3. Homes over 160m work on 10.25k per sq

 

In the other thread the build costs for outer Melbourne seem outstanding - are the prices for construction the same for Hawthorn and closer to the CBD? I would imagine they would be considerably more expensive?

 

Where are they located and How much does he want to sell the 13 lots for. I may buy them as is.

 

if it is existing dwelling knockdownyou will need to add 10 to 20k per dwelling. the prices i stated you need to know what you are. then add another 10k to knock down

 

1. Craigieburn
2. All of that. Don't want to sell rubbish product.

Based on that, a 160m2 house is only 8k more than a 125m2 house. Why such a small difference?

Have you ever used a building inspector for each stage of construction or did your own inspections?

Also ever had any bank valuation issues for the land or house? I'm just trying to figure out that if I get a good quote and the project becomes financially viable then how should I price it to make sure bank vals come good for the buyer. For example if the total cost of house and land comes to 300k but market price is 330k which is what I would want to sell for then how do you add that extra 30k on to the price so banks don't undervalue it.

Maybe @Shahin_Afarin you could also answer the last question as you're an experienced broker and have done some developments.

 

Craigieburn. I'll send you the rest of the details if it I couldnt make it work for me. Just waiting on some quotes.

 

By the way I received the latest price list for Aston, Craigieburn today and prices are getting out of control.

A 400m2 block with a 12.5m frontage selling for $312k. I checked an old price list for August 16 and a similar block was selling for $257k. That's a 55k increase in only 7 months.

Same with Berwick Waters. A client purchased a similar land as above for 265k in Dec 16. Latest release early this month had prices from 295k for similar land. 30k increase in just 3 months.

A lot of people are getting priced out of market even in outer suburbs. That's why I'm quite keen on these smaller lots as it will offer an affordable option to buyers especially first home buyers.

 

I'd be interested depending on price. And if you want to split it up a bit happy to do less.

Are the lots titled? Which estate Aston/Highlands?

 

Yes titled and in Aston.

Hopefully I will know by sometime next week if it will work for me. If not then I'll send you the details.