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Why you need to consider more than just cost per square metre when choosing a builder

As high-quality home builders, we get a lot of questions about inclusions and cost.

Whether from potential clients, fellow industry experts or even via everyday conversation at an informal family barbeque, plenty of people are keen to find out the dollar amount for creating a beautiful residence.

You may be tempted to query a builder when you next get the opportunity, but as someone who’s been probed on price, I have one piece of advice.

Don’t reduce the chat down to simply, “What does it cost per square metre to build one of your homes?” Here’s why.

Builds are complex

I understand why people ask about cost per square metre. It’s been engrained in clients, construction industry types and periphery professionals that it’s fine to use rates per square metre when comparing builder’s quotes.

I know architects speak this way when designing, as will property valuers when assessing. While some might call it a simple method to help gauge the level of quality attached to a build, in reality it’s an inaccurate approach to estimating what you’ll receive for dollars spent.

The cost of building a home is far more complex and nuanced than the ‘per square metre rate’ communicates. For a start, a tweak here and an adjustment there can move the rate per square metre by hundreds of dollars –  which translates into tens-of-thousands when applied to a large home area.

In addition, each project come with its own benefits and challenges. Some of those essential added costs mightn’t be easy to spot, such as additional drainage or extra foundation work on a sloping site.

As such, going generic on the rate per square is just plain wrong.

The only way to accurately assess a rate per square metre is to do a proper costing of the individual project and then divide it by the appropriate number of square metres. But even this can become warped when trying to compare one quote to another, and that’s because not all house areas are calculated the same way

Vary the definition

It seems counterintuitive, doesn’t it? Surely there’s no debating how to define the area of a house? Well, it’s not so cut and dry.

You might talk to one builder who will include garage, balconies, porches and patios as part of the total square meterage and then divide the contract price by that total figure, resulting in cheaper rate per square metre.

Another builder might break down the costs applying different rates to different area types. One lot of dollars per square metre for garage, another for living and a third for the patio. And yet another builder might use just the living area as the gauge. A few years back, some were even applying an ‘under the eaves’ area to their calculations while others were based on external walls only.

Without knowing exactly how the home’s area was calculated, it’s impossible to gauge ‘apples with apples’ when discussing rates.

Buying business

Rates can be misleading, particularly if competitive builders are trying to win your business. By upping their calculated area, they’ll lower the rate making them a very attractive option for budget-conscious clients.

Also, you must understand exactly what is and isn’t being included in the building’s specifications, fittings and finishes.

Some product is sold as house only (e.g. no landscaping driveway or fencing). Others show a figure that includes ‘prime cost’ items. In these instances, rather than defining the inclusions, a dollar amount is set aside for various fixtures – say tapware or floor coverings. If these prime cost amounts are underdone, you’ll be looking for extra funds when it comes time to select the necessary items.

The other area to watch out for is where a building contract appears all-inclusive, but a study of the plans might reveal the level of fit-out is basic – say, just two downlights to each bedroom or a single powerpoint to the lounge. Later, when you ask for a variation to up the finish, the costs start to skyrocket.

How to spot a quality builder

In the world of high-quality construction, the only appropriate way to determine cost is to carefully study the design, specifications, site costs and all other elements before carefully pricing the project.

That’s why choosing a Design + Build builder is essential. They are professionals who understand the nuances of construction and can give you a clear, no smoke-and-mirrors assessment of cost.

In the construction game, there’s no such thing as ‘one size fits all’ when looking at rates.

Instead, go bespoke. Accept that the best builders want to provide the real cost, and won’t settle for a ‘guestimate’ approach that could leave you, the client, short-changed.

Ready to build? Enquire with RODA today.

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