Having a house built can be a daunting task for first home owner / builders, common complaints I hear include hidden costs and ‘tricky’ builders.
For someone within the industry who is familiar with domestic builders marketing, competition, specifications, contracts and soil conditions encountered in Adelaide I argue there is a reasonable explanation for almost all these so called hidden costs and that the market has forced the domestic builders to operate in this manner.
Project (or domestic) builders all produce pamphlets and web pages advertising beautiful houses with list prices accompanied with an asterisk advising you of the various conditions.
As a general rule, project builders price their houses for optimum conditions; flat un-vegetated land with stable natural (no fill) un-reactive soil and no nearby trees and a very basic level of finish to keep prices down. Whilst these optimum conditions are feasible they are not often encountered in Adelaide.
Adelaide has a unique status as being one of the most difficult capital cities in the world in which to build rigid houses (concrete slabs and brick), this is due to our poor quality highly reactive soils.
Adelaide’s eastern, northern and southern suburbs soils generally have a very high content of clay that swells when wet and shrinks when dry (basically on a seasonal basis), creating movement that require engineers to design stronger footings to reduce excessive flex and movement. This is commonly witnessed in older houses as cracks in walls and slabs or doors ‘sticking’ in frames among other issues.
For an engineer to design a suitable footing the site soil must be tested and classified, from this the engineer will design a footing with either deeper beams, thicker beams, piers, stronger grade concrete, more reinforcement, thicker slab or a combination of all.
The cost of the extra materials and labour for this can commonly be up to $30,000 extra over a baseline slab and footing system and sometimes higher for highly reactive soils with trees nearby. This is the number one complaint I hear from people building their first new home, and whilst I can sympathise with them I feel the average home builder has no other option than to follow this marketing system to ensure prospective home builders are ‘comparing apple to apples’.
Another common complaint I hear relates to site preparation: blocks for sale are ever more decreasing in size and width with most house designs allowing for a maximum of 900 mm each side of the house to the boundary. In order to construct a house on such a tight block, retaining walls are often required and hand carting of construction materials can become another potential surprise cost.
People are often surprised to find stormwater disposal from the downpipes to the street is excluded, as is the perimeter paving, driveway, landscaping and fencing. Moving inside all floor finishes (excepting wet area tiles), window furnishing and light fittings are builder excluded items that need budget allowances over and above the builder’s list price.
Finishes such as joinery, door hardware, tapware, and bathroom fittings are often upgraded in display homes with the builder’s standard products that are included in the house list price often very basic.
To summarise, when budgeting for construction costs of your new home the most common additional costs over and above the builder’s list price include:
- Footing/slab upgrade
- Retaining walls
- Hand carting
- Stormwater disposal
- Perimeter paving
- Floor finishes
- Window furnishing
- Light fittings
- Finishes upgrades
Armed with above list a prospective new home builder will be able to set more realistic expectations for their new home and complete their project within budget.
Luke Crilley, Associate
T: +61 8 8274 4666