Five tips as we face high (and rising) construction costs
As you may have heard already, the construction industry is going through a time of quite unprecedented price rises. From what we’ve seen, it’s been a challenging time for both clients and builders alike. Material shortages, shipping issues and delayed timeframes have been all too common, and some are speculating that things may become even busier next year as borders open up to both interstate and international markets.
For us in the architectural profession, this hasn’t been an easy environment to navigate - especially if we work with the best interest of our clients at heart. It’s been difficult, painful even, to have the ground move beneath us as we work. When we’re dealing with real-world budgets for a build, a 30 to 40% increase in cost across the industry, plus GST on top, means often we have to make value management changes - or some clients choose to put things on hold altogether.
So if you are considering building a new home or renovating your existing one, how should you navigate this current environment? We have five tips for you to think through.
Update late May 2022 -
We’ve moved this article up as many have expressed concerns about embarking on their building journey in this current environment. As bad news fill the airwaves (interest rates, building companies going kaput, high labour costs, difficulty in sourcing materials etc), the truth is that we intend to continue with our own, personal renovation projects in the near future. This is for the simple reason that while market sentiment wavers, life doesn’t really stop moving on.
We would encourage you to do your research and tread carefully, and invest in good design resolution and clear documentation. With material prices trending high and extended lead times, it pays off to test, refine and talk through the design and documentation process with your preferred Builder - to make sure that we minimise risk of costly mistakes and delays on site.
Our tips for an uncertain time
Do more with less
Where our skills as architects can really help is if we are able to come up with concise, refined building layout of a smaller area. Each square metre, after all, equates to thousands in build cost. We are not advocating just for downsizing - but for creating more intense and interesting spaces, of enriched experiences and relationships. Remember, as architects, our primary skill is dealing with areas and not project costings. We want to do more with less, and we want to be wise and strategic with your resources. But when it comes to costings, we strongly suggest obtaining qualified advice for our projects.
Remember - As architects, our primary skill is dealing in areas and not project costings. We want to do more with less.
Get costings advice early
To be frank, most architects would admit that budgeting is one of the hardest part of our job. We are simply not trained as cost professionals, and it means costings sit outside of our professional scope of service. That doesn’t mean we don’t consider budget or costs in our work. But it does mean that we strongly encourage our clients to obtain qualified advice when it comes to budget costs, and as early in the project as it is feasible to do so. This is important as any value management changes we make, especially in dealing with areas, is far more time and cost effective when it is done early in the process.
Be prepared and protected
We believe being prepared, in terms of having a good level of design resolution and detailed documentation, helps to safeguard our clients as the full “set” of documentation forms their contract with the builder. Cutting corners in the preparation stage is not a good idea, even though it may be tempting to cut the “intangible” parts when the build costs are high.
Get ready now
Is a downturn coming in 2022 or 2023? Some say yes, and some say no. We don’t have a crystal ball, but we believe it’s in your interest to get started on the design journey early. Projects always take a certain length of time, and it’s a good idea to get at least the core Concept of your home developed so that you are ready to pounce if/when the market conditions improve, rather than lagging a few months’ behind the optimal timeframe.
Finally… we believe that good designs will pay off
Good design not only contributes to reduced running costs and better quality of life, but I believe that as our city grows and matures and properties become more valuable, the level of design appreciation also grows. As a personal opinion, it’s been wonderful to see the level of design rise in the past decade when it comes to multi-residential projects in Brisbane. Higher values have enabled developers and architects to do more, and both residents and citizens benefit from living in and amongst these better outcomes.
I believe the same will come to our residential context. Don’t get me wrong, good, innovative housing designed by good Architects has always been present in Brisbane - but proportionally architectural housing has occupied a small niche, perhaps more in the luxury market or in dealing with renovations. Now, as the city grows and matures, well-designed architectural housing will become increasingly valued.
In fact, a recent University of Melbourne study, as cited by this Domain article showed that
every $1 spent in architectural fees brought $11.40 in capital appreciation
for a $1.2 million house, over a decade the home-owner who employed an architect would be $256,000 better off than one who didn’t
Architectural housing may, therefore, have financial upsides - but to us, the most exciting, important and tangible factor is how good architectural design benefits you and your family in your everyday life.
For a $1.2 million house, over a decade the home-owner who employed an architect would be $256,000 better off than one who didn’t. Architectural housing may, therefore, have financial upsides - but to us, the most exciting, important and tangible factor is how good architectural design benefits you and your family in your everyday life.
The time to act is now. So get in touch!
Here at EVER, we are passionate about bringing good design to everyday people. We love our city and its suburbs, and we love seeing our clients thrive in their homes. So if you feel ready to take the plunge, or if you are curious and would just want a friendly face to chat to, get in touch - we’d love to help.
A free consultation with us will be the first step on your journey. We look forward to meeting you soon!
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This article was originally published in December 2021.