30 November 2017
Posted by: Evolution
Time to read: 3 mins.
When you shop for fruits, you probably look for a uniform unit, such as per-kilo price, when comparing costs.
Following this principle may seem logical when deciding on a builder for your next home, but sizing up square meter rates is rarely an apples-to-apples comparison. With fruit, usually what you see is what you get. With home-building, you need to dig deeper to figure out what those rates actually include.
Advertising a low square-metre-rate attracts customers, and some builders achieve those low rates by excluding essential elements, like the cost of foundations, building consents and design fees or by compromising on the quality and quantity of features.
Clients often find that the final cost is much greater once all of the “extras” are revealed. Often cheaper quotes will leave out items you have to put in later, or under-quote on items your contractor expects you to change later, for which you will get charged extra as “variations”.
It’s fine to ask a builder for a square-metre rate to get an idea of whether their services are in your ballpark budget, but here are eight questions to follow up with:
1. Is the rate for design-and-build or for pre-concept plans? You can save money by choosing an existing design, but if you expect a bespoke home, make sure that’s what you’re getting quoted for.
The shape of the house will also have an impact on cost. For example, one of the key things that determines how much a home costs to build is the length of its external walls. An H-shaped design with the same square footage as a rectangular design will cost more because it requires more lineal metres of framing, cladding, vapour check membranes, paint etc. Internally, small, complex spaces cost more to build than large open plan areas.
2. Does the rate include the Goods & Services Tax (GST)? Fifteen percent may not sound like much on a lower-priced item, but consider that the GST on $800,000 adds on a significant $120,000, bringing the total to $920,000.
3.Does the rate include Building and/or Resource Consent? The first consent is mandatory, so it needs to be factored into the final cost. Resource Consents apply to work you intend to do on the land and may be required if your project does not meet the requirements of the Resource Management Act.
4. Does the rate differ depending on the size of the house? Larger houses are less expensive per square metre to build as the fixed costs (consent fees, site costs, delivery costs, etc.) are spread over a larger area. Garages don’t cost much to build, but kitchens and bathrooms do, so an attached garage brings down square meter rates while adding a bathroom will increase it.
5. What level of quality materials do Prime Cost (PC) Sums cover? The type of material used for features like cladding, window joinery, flooring, tiling will affect the cost. Stone benchtops and triple-glazed windows cost more, but often add greater value to the finished home.
It’s acceptable and necessary to include PC Sums for selections that may not have been determined before building begins. You may need more time to decide on the look of your kitchen, so a PC Sum will be itemized in the contract. Make sure the PC Sum covers the cost of the type and quality of kitchen you desire.
6. How much of the site preparation is included in the rate? Ask whether drainage and services outside of the building platform are included. Excavation costs are often excluded from advertised square metre rates and will often be put in as a Provisional Sum in the final contract because of factors such as ground condition, site gradient and complexity of earthworks. It is also good practise to obtain a geotechnical report/sub soil investigation to help mitigate unknown factors, such as rock or soft ground which may be encountered once works commence.
The elevation, size of building platform, distance from services and ground type will affect the final cost.
7. Is hard landscaping, like driveways, decks and patios, included? Even though these features may appear in the floor plan and are considered an integral part of making the home liveable and comfortable, they are usually not included in the quoted square-metre rate, which means they need to be factored in additionally.
8. What type of electrical plan is included? A story was recently shared about a customer who had chosen a builder based solely on price and thought the five outlets included in the kitchen plan would be sufficient. When she moved in, she realized that three of those outlets were designated for the fridge, microwave and dishwasher, leaving her with only two for everything else.
Price is important, but with so many elements going into building a home, figuring out the actual cost is not easy.
Working with a company who uses professional Quantity Surveyors (QS) will ensure you’re getting the most accurate estimate. Evolution benefits from sharing offices and resources with its parent company, Rilean Construction, who have Quantity Surveyors in both Queenstown and Christchurch.
Choosing a builder is not like buying fruit, so don’t simply choose the cheapest. Your home is an investment, so make an informed choice based on the best value and potential return.
If you're looking to build an energy-efficient home in Central Otago or Canterbury, please contact us. We appreciate having the opportunity to answer all your questions.