Building costs can blow out

From past experience with material and labour cost.
Price goes like this - elevator up!, Escalator down!
I can't say it would ever go back to previous level. It must be oversupply of sort for that sort of things to even happen.

 

Builders can put up prices purely on demand. Perth does not have enough stock to meet demand
It could take years ?????

 

Unless things like demand is no longer there and over stock. Price wouldn't fall for years.

I am just worry about project delays in current environment.
I have head big projects been delayed 6 months due to current crisis.
I can't afford the delays if I can avoid it as price won't come down anyway in 2023 to previous level.

 

I agree with you

Delays and more delays. I am one of the lucky ones, maybe blow out of 3 months. I know 2 investors that will be blown out to 12 months

My brickie went off site for 2 weeks to build his FIL BBQ But if I churn him out he will just leave.

He has people approaching him on my site every week …..as there is such a shortage of good brick layers. I am sucking it up no choice, nearly there

 

Heres a tip.
A case of his favourite drop end of the week for the brickies.
Your job will go super smooth with no delays or errors.

 

That simple, why did I not think of this….. thx

 

Just found out from builder today that he can not get all our timber until 20 February.

Sign of the times

 

We got some timber delivered finally and roof carpenter started on unit 3 yesterday.
Still waiting for the rest

According to Satterley one of WA largest developers stated ….timber has gone up 70%. Find this hard to believe.

 

Why do you think it's untrue? or do you mean that it's just crazy that timber has gone up that much.

 

My brother's duplex will be finished up in March 2022.
He is pretty stoke about it. Didn't pay extra $$$ for the price increase.

 

yes

 

Two years ago in Victoria we were paying $2.40/m for 90x45 pine, now it is more than $6./ We would take a 70% rise over that any day.

Tools

 

Wow, crazy

 

Update

timber delays and costs going through the roof

New arrival dates
Mid feb for unit 2

mid march unit 1

Unit 3 got timber and keep moving with this one


Another blow out for builder. 13.5% increase for laminex

We are continuing with unit 3 while waiting for timber to arrive

Meeting with cabinet maker this week

The way things are going I expect my build costs probably gone up 20% from signing contract. My price is fixed

The good news is my villas have gone up maybe $100,000 each. No rental stock driving rents up.

I started with rent estimate of $450 pw each, today more like $580-600 pw
Estimate of $7000 depreciation each villa


Good luck to anyone starting to build in Perth market today…… think carefully. I think its going to get worse

 

Unfortunately there doesn't seem to be an end in sight for the increases - and of course the associated holding costs of projects taking longer to complete.
8-12 week lead times for a lot of items and then trying to coordinate trades to be available when there is no guarantee that the items will arrive is doing all the builders heads in.
I know there has been a huge movement of people saying that builders are taking the **** when passing on the price increases but honestly I think a lot of them are legit when I see all the monthly bulletins from places like Independants, GBI, Colli, Johns Building Supplies etc etc.
Builders pricing up at the moment are trying to predict where the increases will be and by how much so that they can still offer fixed price contracts and keep their heads above water. It's not an easy time being a developer or a builder.
Smaller builders are trying to push for Cost Plus contracts where they can but banks don't like these.

 

I have never the building market like this since 2001 boom.

 

BTW
What is the procedure if builders pass on price increases, do they have to advice client ? Surely
Or do they tack it onto progress claims

 

Yes looks like you and my brother have done very well.
Building cost gone up 30%
House price gone up 40%

Count your lucky stars.

 

I do have concerns as to how my builder will absorb this. I guess its natural, I dont want anyone to go broke, repercussions wont be good

My builder young guy, very switched on, also owns a roofing company which will be used for my deve

 

First they have to meet the requirements to be able to pass on the increases. Then they have to notify the client, if the amount is more than 5% of the total of the contract then the client can chose to terminate the contract, pay the amount requested or negotiate with the builder and see if they can get it down. If it's less than 5% increase then their only options are to pay or negotiate. The client can also appeal to the Dept of Building and Energy and they will investigate and see if the amount and circumstances are valid

WA Dept of Commerce has created some documents to assist clients