Building Costs - Perth

I can't see building costs coming down anytime soon.
You may get SOME builders lowering their own margins as a result of being quiet but as long as they have work the prices aren't going to be going down.
I know for fact there has been plenty of prices for these guys from all over the place. The industry that I'm in selling Stone & MDF/Melamine/Hardware know that most things have gone up 4-5%. When you add this ontop of inflation YOY for the builders wages from labourers through to receptionists I really don't think the prices are going down anytime soon.
 
I was speaking with another large builder today who averages 90 homes per month and they are down to 45-50... So it's a sign that there are people out there struggling for work. Does this mean they'll start cutting each others throats and lower the price for building?


Don't listen to sales people, they have a vested interest, it's all smoke and mirrors, look at the facts.

market condition today is all that matters,
Supply vs demand

My builder said he is already offloading, not the case 9 months ago.

We are now in a downturn, not boom, this effects all markets, including building. What this means is that end values will drop, it's happening now.

People stop buying, building, numbers fall off. Development sites do not make sense, no profit, only fools will build to make a loss, or take a risk that end values will stack up on completion, high risk

Mtr
 
Don't listen to sales people, they have a vested interest, it's all smoke and mirrors, look at the facts.

market conditions is all that matters,
Supply vs demand

My builder said he is already offloading, not the case 9 months ago.

We are now in a downturn, not boom, this effects all markets, including building.

People stop buying, building, numbers fall off. Development sites do not make sense, no profit, only fools will build to make a loss, or take a risk that end values will stack up on completion

Mtr

Smoke and mirrors? I wasn't there as a client of theirs. I was there, for business selling them material. When I walk through the production area and it's quiet with little amount of stock sitting there it's a sure sign.

All I said was that their demand was less than they would normally supply? your message confuses me. It seems like you read the first 10 words that I wrote, and then stopped.

My whole point was that people weren't building hence them running at slower numbers than usual?
 
I don't believe the prices have dropped yet, but probably due to the projects they currently still have on their books.

I met up with my accountant this morning he said his developers are trying to offload asap and not buying as market conditions getting worse and waiting to see if there are any surprises in May budget.

I suspect developing will drop off dramatically, very soon and building costs will fall, however so will end product.

MTR:)

This is actually one of my other favourite times to build - the other being on the beginning of the upturn. I hate building during the peak.

It will be interesting if costs will come down, the main component that is likely to fall will be labour not product. It will also be nice to have things not constantly delayed by tradies being stretched over too many projects.

However I'm a hoarder/investor and hold more than I sell so I'm different to the typical developer.
 
I was speaking with another large builder today who averages 90 homes per month and they are down to 45-50... So it's a sign that there are people out there struggling for work. Does this mean they'll start cutting each others throats and lower the price for building?

Sorry Jamie, I definitely got confused, Totally get it.
I best stop using drugs:p:
 
This is actually one of my other favourite times to build - the other being on the beginning of the upturn. I hate building during the peak.

It will be interesting if costs will come down, the main component that is likely to fall will be labour not product. It will also be nice to have things not constantly delayed by tradies being stretched over too many projects.

However I'm a hoarder/investor and hold more than I sell so I'm different to the typical developer.



I consider a mix of both. Hold and sell, just depending what makes it cash flow positive and market conditions

Building in peak is a pain as you mentioned, delays etc. which in turn eats into your bottom line.

In terms of building in a downturn there would be positives for sure, ie cheaper to build, less time to build. The negative is on completion the end value may have dropped off considerably and therefore higher risk??

What I have noticed is if you are lucky enough to buy at the beginning of a rising market you can possibly make more money on the land and not build at all, that's a nice position to be in I think

MTR:)
 
In terms of building in a downturn there would be positives for sure, ie cheaper to build, less time to build. The negative is on completion the end value may have dropped off considerably and therefore higher risk??
I want to start building in Perth in the next 6 months. This is a long term hold, so end values won't affect me as I'm not borrowing against the new townhouse to purchase further properties. The only factor for me is for the townhouse to be positively geared. I'm going to be making money off this one. ;)
 
How about building cost for apartments?

I heard that cost/sqm increases as the number of floor increases? Due to elevators and etc.

If so what would be the cost/sqm for a 2 storey development vs 3 storey and so on? Is there a rough guide out there to calculate?

200k per unit for a 75 sqm 2 bedder in double storey development, does that sound right? Equates to about $2,667/sqm
 
What I have noticed is if you are lucky enough to buy at the beginning of a rising market you can possibly make more money on the land and not build at all, that's a nice position to be in I think

MTR:)

Hi Marisa - a lot of people did that, when they could have bought 3 x 350k 1000sqm lots in Mt Druitt in 2012 and sold now for $750k x 3 = $2,250,000 less 1050k loan. Nice to look back....they were sooo cheap!
 
I want to start building in Perth in the next 6 months. This is a long term hold, so end values won't affect me as I'm not borrowing against the new townhouse to purchase further properties. The only factor for me is for the townhouse to be positively geared. I'm going to be making money off this one. ;)

Nice, cash is king at the moment.
Will you be accessing equity, end values important if this is part of the strategy

Mar:)
 
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Was also interested so did a quick search:

http://www.bmtqs.com.au/construction-cost-table

Seems low and saw another site that estimated $2800/m2. Depends what it includes I suppose.


How about building cost for apartments?

I heard that cost/sqm increases as the number of floor increases? Due to elevators and etc.

If so what would be the cost/sqm for a 2 storey development vs 3 storey and so on? Is there a rough guide out there to calculate?

200k per unit for a 75 sqm 2 bedder in double storey development, does that sound right? Equates to about $2,667/sqm
 
That's very interesting, sign of the times.
This also means they will travel wherever they need to go for work, my builder could not get the brickies to go south of the river, once again causing delays on my project

Mir:)
 
That's very interesting, sign of the times.
This also means they will travel wherever they need to go for work, my builder could not get the brickies to go south of the river, once again causing delays on my project

Mir:)
Wasn't your project in spear wood? Sounds like your builder was talking nonsense, that's hardly on the edges of the city
 
Wasn't your project in spear wood? Sounds like your builder was talking nonsense, that's hardly on the edges of the city

Yes sanj it was
The project manager let slip on completion that the brickies who lived NOR preferred to work in these areas and because they had a choice they struggled.

It does make sense as at the time he was a small operator and my build and g/friends were first SOR, can't help bad luck

MTR:)
 
Need to know wha the spec is for 1200 sqm, I worked out around 1300 sqm for my last build in Perth and that was high spec.
 
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