Two townhouse development in Inner City Melbourne

I am building 2 larger size architecturally designed townhouses about 4km from Melbourne CBD in a B+ grade part of a A+ grade suburb.

Approx cost for construction will be circa $1.9m inc GST under an ABIC contract administered by my architect.

Had a lot of builders withdraw interest from the tender process for various reasons, many claiming to be too busy.

Now have 1 (possibly 2) reasonably competitive tenders that are higher than initial estimates but within budget.

I'm a newbie to this and have learnt alot along the way and still have many gaps in my knowledge. My questions are:
1) what is a reasonable amount to keep aside for additional costs other than holding costs? I am budgeting 5% or $95,000 inc GST. Costs I am anticipating include: costs relating to a sewerage easement, costs for an electrical pit, costs for any items missed or uncertain in the architects specifications, costs of the building permit (do I pay that or does the builder?), costs of subdivision.
2) are there other major costs other than holding costs I may not have considered? I have already paid for all architectural and engineering fees, soil reports, energy certification, and planning permit costs.

I appreciate any thoughts or suggestions...

 

Generally allow 10%. You'll still need allowances for subdivision (survey, legal, DA & lodgement), latent conditions, wet weather, extension of time/delay costs, adjustment of provisional sums and the list goes on....

 

Which part of the budget has:
- council fees
- stormwater fees
- water/sewerage fees
- power and gas headworks

half of that 5% could eat up for those items. Not leaving much for any other budget overruns or over sight.

Have your architect run through the tender replies and make sure you understand what will still be your responsibility and not included in it.

 

My architect has not run me through other costs - I think that will be the next step. I'm trying to educate myself prior.

10% seems a lot for 2 high priced homes - $190,000 - that's $95,000 per townhouse for fees.
My council has public contribution fees for subdivisions of 3 or more units but not for 2 townhouses.
Do you think it is a linear percentage? I would have thought 2 x $950k townhouses would require less contingency than 5 x $380k townhouses, for example.
The ABIC contract has liquidated damages for time overruns which would cover my holding costs.

Perhaps my 5% is overly optimistic, but just trying to understand why a $950k townhouse would cost more in absolute dollars than a project home type build

 

because project homes are cookie cutter exercise and its volume, you have one off design and specifications may be higher than project homes

 

Contingency is contingency. You try and not use it but you need to factor it in, especially for a first project.

Who is going to be responsible for finishes?
- tiling
- carpets
- air con
- driveways
- cross overs
- landscaping
- demolition

What is the end projected value?

 

Cross over I'll need to check. The rest are in the builders fixed priced contract. I realised it might be a bit cheaper if I organised demolition and landscaping myself but I wanted it as close to turn key as possible so the responsibility lies entirely with the builder.

 

In the tender have you picked the appropriate level specs needed and not just gone with the standard range? Unless specified what you want and brands as well, your most likely going to get specs that don't match your arcitectutally designed development and making variations later on will be costly.

 

You won't get any argument from me on this. I like turnkey

 

Hi Leo,
It's all specified and it appears there aren't too many gaps in the working drawings. Eg. premium tiles, marble and caesar stone finishes, wool carpet, Miele appliances. Almost everything is down the letter with the builders so far only identifying some minor areas of the working drawings where elements are unclear.

 

Do I pay the building permit or is that usually incorporated into the builders price?

 

It's not usually included, so best to check.

 

Which suburb is this? 1.9 mil seems a lot for 2 townhouses