Building costs can blow out

Yes, have been doing this

 

The other problem for builders I am hearing, is they are experiencing limits on their insurance. The insurers are capping the number of homes they can have under construction, which impacts on the builder's cashflow. With long build times and extended periods between progress payments, one builder has mentioned they need twice the amount of homes on the go the meet cashflow requirements, however they can't increase the number of builds due to insurance restrictions.

 

[+] Rising Construction Costs: Will Banks ‘Play Ball’?

Rise and fall clauses in building contracts are increasingly on the table as developers and builders team up to crunch the numbers to hold Australia’s teetering construction industry together.

But a significant risk remains from the sector’s most critical allies in the battle to prevail through the “profitless boom”.

 

you think you'll try and hold for 5 years just for the gst? i would have thought you'd get a premium for the product being brand new and thus defeating the savings of waiting 5 years for gst? in the area i'm looking at even townhouses that are 2-3 years old is a bit of a price difference then brand new ones least 50k (50-70k) i'd say.

 

not doing this for gst savings, insignificant in the bigger scheme

Keeping for the cashflow. Currently will rent each villa for $650 each. No debt and $21k depreciation. New product has little no maintenance.

Willagee is also what I consider a stellar suburb, all good reasons to hold long term

 

Not building, but on the ground getting quotes for a major IP reno and it seems things are literally coming down to Earth as we speak. Tilers, painters, retic, demo all ready to quote and start within days. Reasonable quotes.

From chatting to people, they feel stockmarket crash and interest rate rises hace caused a huge decline in private demand. You'd think having to head back to the office could be a factor too, easier to postpone that reno and live with the shabby bathroom tiles if one is never home anyway. The Covid home reno boom is over.

I feel strongly we should see a flow on to the quoted cost of building within 6-12 months but somewhat mitigated by materials and transport costs.

Tumultous year ahead in the construction industry, me thinks.

 

Agree. Speaking to a few and seeing the difference compared to a few months earlier when everyone had no time even to talk. Now everyone keen to quote and get new jobs.

 

What's everyone's thoughts on Council requesting a $20k fee for a work zone in a cul-de-sac with only 3 houses? Seems ridiculous to me

 

Survey blames 'perfect storm' for making Perth the most expensive place to build in Australia

 

Good to hear, not in every State

Got a quote for concrete this week, small reno project, 2 quotes so far
$4800
$2900

same job. See this alot, huge discrepancy in prices.

 

Government grants for building did not help current scenario.

I got $60,000 for building 3 villas. I know another investor who got $80,000.
This was in my Trust name, they threw so much money at it. Anyone building could apply for this grant

 

Update on my project

Finally locked up
All cabinets will be in this week
Concrete for garages down next week

Relieved that my builder does not have cash flow issues.

To date two variations, $5000. These were my changes, builder did not charge fee for this

To date very happy with quality of the build and the builder

 

Experts forecast when surging construction cost inflation will ease
https://www.news.com.au/finance/bus...e/news-story/aba1e39e5bbf1e58fab2bfdc0341b730

Looks good.. but I would caution on how accurate it is.
They are the expert. What do I know

 

5% growth is still a lot...

 

Update - I am seeing price ease off on structural steel, reinforcing steel and sheet metal.

Take it with a grain of salt if it will fall dramatically.

Enjoy this little news.

 

'Every promise is broken': Builders and their customers left broke and out of pocket by construction cost blowouts

I was almost right with my prediction 20% median increase in construction cost in 2022.
Not something I would be proud and brag about.. I want it to drop sooner than later.

 

Whats your prediction for next 6 and 12 months? I need to start construnction of a quadruplex and duplex in 6 months and 12 months respectively.

 

Price is currently stabilizing. Which ever way you like to look at that term.
It means to me there won't be shocking 20% increase in the next 12 months.
I am going to start my build in 2023 July or much later. I am pretty confident at least I will start 1 build and see to its completion in 12 months. Then start the 2nd build after 2024.
If I get the first build timing wrong, I will have the next 12 months to assess the 2nd build.
Hopefully the build time of 12 months will shorten and go back to the "normal" whatever that is.

Why don't you start 1st duplex first and see to its completion. Then start the 2nd duplex?

Skill labour constrain is still a huge problem, even though sourcing material is starting to ease.

Edit: I've just realised you are from Perth. Heck Perth construction market I have no idea about. I only look at Sydney and Brisbane as this is where my stomping ground.

 

Thanks. More or less Perth will have same construnction market as eastern state in terms of price rise. I have heard that bricklayer shortage has started to lessen in Perth.

I cant duplex first as its tenanted till May 2023. Quadruplex site is the one where tenancy is ending in Dec/Jan.

 

Update… scary stuff

Allowance for landscaping was in 2020. $8800. provisional sum (ps)

brick paving $21,500 ps

Decided to source my own quotes for above
2 quotes for landscaping only over $16,000, gobsmacked

I have to date 16 quotes ……and I can tell you crazy prices.

Have finally narrowed down to 2 quotes

$5800 landscaping
$14500 brick paving, I supply brick paving
In my budget

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