Building in uncertain times – is it a good idea?

Building in uncertain times – is it a good idea?

I’m a big fan of building a home from scratch. My husband and I have built in the Newcastle/Hunter region four times and my role is to help people through the process of building their new home – so it’s safe to say I’m a building addict!

However, building a new home may seem like a scary prospect to many people right now.

The recent collapse of some well-known building companies has, understandably, left people concerned and I am often asked if I think a particular builder will ‘go broke’. The answer to this question is not always obvious. In 2021, a large builder I had reliably been dealing with for nearly 9 years folded despite there being no apparent cause for concern.

It turns out they were trading insolvent long before any of us knew and the dreams of many people were shattered.

Builders have faced the perfect storm over the last few years. From trade shortages due to people being sick with COVID, to tradies leaving the industry.

There have been shortages and delays in materials, resulting in substantial price increases. Not to mention the weather – some blocks will not dry out in time for slabs to be poured. (Thanks, La Niña!)

All of these challenges make for a stressful environment for builders and their trades, often leading to significant and heartbreaking mental health issues.

People embarking on a new build are often afraid of the real and final cost. On average, the price to build a new home has increased by around $100,000 over the last 2 years.

Large display home builders will disguise this increase with offers of free upgrades here, and bonus inclusions there, but in reality will charge a huge amount in variations when the house is being built.

Most big builders do not quote a build on a specific block of land. They provide a rough cost guide, but this does not include factors such as rock, soil type, bushfire requirements, estate guidelines, and so on.

When the build starts, there can often be extra, unexpected costs for piering, soil removal or import, tree removal, retaining walls, drainage, or extra council requirements.

These items may not be included in a build contract, yet certain clauses give builders the right to charge extra for them.

This is one of the reasons I started offering a Tender Health Check service. I forensically examine build contracts and tenders to provide comprehensive and independent assessment. Meaning that clients have the true picture before they sign on the dotted line avoiding surprise costs and eliminating stress.

So if you’re thinking “why would I build?” let me reassure you that the benefits do outweigh the potential challenges!

For starters, it’s really ‘your’ home – you design it or choose a plan. You select the finishes on those harder-to-change items like tiles or benchtops. You choose the colour of the paint and flooring. New homes are often in new estates surrounded by other attractive new homes and everyone around you is doing their best to create a pleasant neighbourhood.

Maintenance costs are low and appliances supplied with the home have warranties. But the most exciting part is seeing your dream home rise out of the ground! The key is to ensure you understand your contract (and what is and isn’t included) giving you confidence and peace of mind.

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