How much should my new building cost? Part II
In previous post, we discussed about the factors that influence the cost of our proposed building. We know size does matter in the building cost. But does the double sized house double the cost? NO.
As we mentioned, many “building experts” use square meter rate to calculate their contract price, we will explain to you why this method is misleading.
There is nothing absolutely wrong about using the unit rate but it is only good for very rough estimates at very initial stage of projects to assess financial viability and get bank preapprovals in place.
For example, two 240sq2 big, four-bedroom houses each with double garages, two bathrooms, exactly the same kitchen, exactly the same inclusions. House A is on an almost flat-leveled block with sandy soil and geotechnical ground assessment “A” which is the best possible result. The architector designs a single storey house with an easy access for construction in a quiet court with minimal traffic. House B is located on a steep block on a subdivided backyard of an existing house on the front and the geotechnical assessment result is “P” (indicates problematic). Due to the limitation of the available space, the house is designed as a double-storey building to include four bed rooms. Because of the building regulations, the upper level has to be further away from land boundaries, resulting in the walls of upper level not being ‘shifted’ further in than ground floor level. In addition, the block is on a busy local street near a busy intersection with no off street parking available for traders.
You don’t need to be a building expert to know that House B will be much more expensive to build than House A, regardless that you get exactly the same number of rooms and the inclusions in either the house.
Houses A and B are real life examples and both built by Toto Properties. A few more costs that are applicable for house B including
- The foundation has to be founded on bored piers 2.4 meters deep in the ground with extra steel reinforcement;
- Concrete need to be pumped with concrete pump from a busy intersection requiring traffic management and partial road closure;
- The size of the slab is smaller than House A but requires the same amount of concrete due to the significant depth requirement;
- Installation of complex structures of steel and timber beams to support upper level;
- Additional traffic management cost for all large deliveries abd
- Installation of storm water detention system required by council which cost additional $18,700.
What’s the unit price for each house in the end? House A was $1,150 per sq2 while House B is $2,320 per sq2! Yes, more than 100% difference.
It takes lots of experience and many hours of work to calculate an accurate figure for a house construction cost with surprise cost blow up. Based on the design and site condition, we do provide our clients with an approximate cost estimate for free. We take pride and responsibility in our 100% customer satisfaction guarantee! Thus, we strongly recommend our clients to engage an external professional estimator to avoid potential costly delays and price blow outs.