WA - West Leederville 6007, 3 unit development

Hi guys,

Just for kicks since I am bored :) and since I know how we "Perthians" are very much in love with double brick construction.

Having lived in frame built construction for 15+ years and now living in my brand new double brick house in Perth, I am sharing from experience and also as a professional builder.

Regarding insulation and thermal properties, frame construction with batt insulation far exceed homes built with double brick. My current home in Perth is double brick and I am regretting it every time it gets into the mid 30s (north facing). I am not used to such huge temperature changes in my house. I won't even go on about the car noise from the residential street.

Now the stats...
-Brick homes built more than 15 years ago avg 2.3 star rating
-today the requirements for new constructions is a 6 star rating
-frame with batt insulation constructions can easily achieve 8+ star rating

On top of all of this..the savings:
-frame construction is 2 - 3 times quicker
-meaning you pay less in bank loan, can start renting/selling your place quicker
-higher equity valuation (due to higher star rating) means more equity to invest in other projects.

just a quick thing about how big a deal it is to move from a 6 to 8 star rating. From 6 stars to 8 stars you would need to show that the home is on avg 50% more energy efficient to live in

oh I did a quick analysis and you would also save around 18%, (125k) in construction cost on top of all of this!

no wonder every country including Sydney prefer frame construction over brick.
What builder do you work for?
 
sounds great! west leederville set for some serious growth over the next few years, yields dropping or not.

would love to see the plans and site!
 
What builder do you work for?

I would like to make a small correction to my previous post on cost. The 18% savings is for up to lock up stage. For turn key it is more around 9-12% savings.

I don't work for any building company now. You can never find this type of construction price if you go with a big building company. There's simply too much overhead and restrictions. My business partner and I run our own building company, it took us many years but we are sourcing everything directly and we have been doing our own private developments, but mostly our strength is in building multi-units (3 units and up to 40) with quality materials, mostly from Germany and Australia, to achieve the 8+ star rating.
 
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-higher equity valuation (due to higher star rating) means more equity to invest in other projects.

I would expect a lower valuation in Perth for a brick veneer house compared to double brick. It is seen a a lower standard of building. Even with its higher star rating.
 
I would expect a lower valuation in Perth for a brick veneer house compared to double brick. It is seen a a lower standard of building. Even with its higher star rating.

It depends. We are seeing a market being created especially in the inner city areas of young professional (aka maybe Hipsters) who appreciate the eco and sustainable methods and will pay for it and appreciate it.
 
I would like to make a small correction to my previous post on cost. The 18% savings is for up to lock up stage. For turn key it is more around 9-12% savings.

I don't work for any building company now. You can never find this type of construction price if you go with a big building company. There's simply too much overhead and restrictions. My business partner and I run our own building company, it took us many years but we are sourcing everything directly and we have been doing our own private developments, but mostly our strength is in building multi-units (3 units and up to 40) with quality materials, mostly from Germany and Australia, to achieve the 8+ star rating.

Care to link some previous developments in Perth? if you've done any here, even just old RE.com.au sold adverts would be cool to see.
 
edited .. forgot to quote my response to "I would expect a lower valuation in Perth for a brick veneer house compared to double brick. It is seen a a lower standard of building. Even with its higher star rating."

we have a real estate agent in the family and also having been involved with building and refinancing homes, in all these years I have yet to come across a bank or any other institution that's care enough to ask about what type of structure we have in our building. granted it is not unthinkable to ask this question but I believe this is just something rooted only in our Perthian's psyche. also I have not gone through 100 different agencies so maybe the 99th one may ask me one day...

having said all of this, I am afraid you may be right to the degree that there may be enough Perthians out there who still feel if it is not double brick it is not a "real" house...maybe even revolting to them :eek: marketability would definitely be something to consider in this case

We Perthians have this strange fascination with double brick building. It is usually not something anyone else in the world would normally ask or care about either (whether it's double brick or frame)..

on the other hand, a star rating is quantifiable enough in any construction to warrant a higher valuation. It is immediate savings that are very real in terms of $$. Additionally, it would automatically warrant a higher valuation simply due to the fact that the materials are of higher quality and more expensive during construction.
 
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For me the question was more - would potential tenants care if not double brick?

Through some brief conversations with valuers it seems to be a neglible difference whether upper floors are constructed from masterwall or double brick.

I would expect perspective tenants would care more if they have to pay more or less to the utility companies each month/year.

In terms of structural integrity and physical appearance there would be no difference to the unsuspecting buyer/tenant. Once rendered there is no way to tell if a house is double or single bricked or framed or otherwise. Not without knocking on the inside wall or climbing into the attic.

It is only an issue with customers who's got those strange fascination with double brick homes .. I think they have developed this keen smell for double brick homes and can smell it or something..:p
 
Care to link some previous developments in Perth? if you've done any here, even just old RE.com.au sold adverts would be cool to see.

thanks for asking and reminding me .. I should start making a habit of taking more pictures and maybe even some more selfies :rolleyes:

I'll be sure to post some after I get back on site .. which is after the long weekend holiday.
 
I have to admit I was really shocked that double brick and internal brick walls were considered the norm.

It made no sense to me being originally from Melbourne.

But once something becomes expected and deemed to be the best option you will struggle to change their mind.
 
I have to admit I was really shocked that double brick and internal brick walls were considered the norm.

It made no sense to me being originally from Melbourne.

But once something becomes expected and deemed to be the best option you will struggle to change their mind.

Things are starting to change and I think it's often lazy developers and builders blaming a market that is potentially more open to change than they are.
 
Things are starting to change and I think it's often lazy developers and builders blaming a market that is potentially more open to change than they are.

quoted for truth.

shangrilada - don't feel the need to justify your position.

in the eyes of many perth-ites on this forum, myself included, double brick and apartments are not mutually inclusive.
 
Progress update

Thanks all for the input/opinions to date.

Update time, apologies for the wall of text.

Builder chosen.
Just before Xmas we committed to a builder for our project. It came down to a two horse race with builder 1 constructing in double brick lower and masterwall/framed upper, builder 2 would have been using SIPS panels upper (with an option to also do SIPS lower, with a SIPS slab if we wanted).

Although speed of delivery for the SIPS option (builder offered a guaranteed 20 weeks to hand over from slab down if all SIPS) was an extremely large incentive to choose builder 2, the lack of a completed building that I could view that used entirely SIPS (I especially wanted to see a SIPS slab) plus the lack of technical details they could provide swayed me to builder 1.

I will definitely be re-evaluating the SIPS option for my next development as I was really impressed by the concept and the reduced timeframes, but it was a step too far into the unknown for me and my first development.

So looks like Inspired have got our business for this project, my choice being based on their pricing, spec inclusions, their willingness and ability to offer suggestions to improve the design and construction materials used without affecting quality or end cost, the workmanship quality of previous builds I viewed, as well as the ever important ?gut feel? you get when dealing with them.

Inspired will be building the project turn key for me.

Construction cost increase
I had initially estimated construction costs would be around $700k turn key, but the cheapest I could get will be closer to $750k, approx $650k for the building and $100k to bring up to turnkey.

Obviously the cost increase reduces my estimated return for the project, but it can be accommodated within my finance limits and does highlight the importance of confirming as much detail during your due diligence as possible. I think confirming construction costs is pretty hard to do when its not a ?vanilla? product (eg single level triplex villas), but I will be erring on a more conservative side for subsequent projects.

A tip for new players. Where I made my mistake was my estimation used a rudimentary $ per sqm calculation for the floor area of the total site. What I didn?t take into account was that although my total sqm for the project is relatively small (approx. 250sqm for three apartments), each apartment will have a kitchen, two upstairs bathrooms and #1 and #2 have downstairs toilets. So that?s 3 kitchens, 6 bathrooms and 2 separate toilets over 250sqm. As these room types cost more than bedrooms/living areas etc, it undercooked my initial estimations.

DA application.
Plans have been submitted to council about a week ago, here?s hoping they review the plans as quickly as they deposited my application cheque!

I previously said I would post up a copy of the plans once committed to a builder, but I think I?d now rather hold off making the plans public until we get through the DA process.

Using a building broker
Please note that below are just my personal experiences to date in using a building broker, not a review, criticism or endorsement of their services. What I found good or bad may be different in your circumstances.

Using their designer ? I was very happy with their in-house designer and his ability to translate my garbled set of ideas/needs/wants into a usable design. No qualms there from me. The thing to be aware of though is that you don?t own the plans, the broker retains copywrite, ?releasing? the copywrite once signing with a builder through their tendering process. So while you do get an advantage of having builders all tender off the exact same set of drawings, its similar to if you approached the builders individually in that you don?t own the plans outright. You?re not locked into one builder to use those plans, but you are locked into going through your broker to use those plans. Also note that you can choose to bring your own plans and just use the broker for tendering.

Initial tendering ? this is a stage of the process that I feel there was value for me in engaging a broker, on two fronts. Firstly if you don?t have the time to canvas builders yourself, secondly my experience is the ?hit rate? for responses back from builders is higher through the broker than if doing it yourself. Approaching builders yourself ?cold? can be a frustrating experience with many calls not returned/time wasted. The broker was also happy to engage and send out tenders to any builder of my choosing that wasn?t on their list.

Independent tenders ? the broker also had no problem with me doing my own independent tenders if I wished, to ensure the pricing was competitive. I actually did this, receiving back one verbal estimation and one written estimation, both tangibly higher than the two shortlisted builders through the broker, but lower than some of the tenders received back through the broker. This gave me some comfort that I was at the very least getting competitive quotes back using the broker.

Shortlisting prospective builders ? while the intention is the returned tenders should all be based on the same spec list, this is not always the case. There is still a fair bit of interpretation needed when comparing the responses, more than I would have liked/expected. But two builders stood out on costs and inclusions.

Choosing a builder ? this decision is (rightly so) completely with you to make, the buck stops with you. I think a broker may add value here if you were completely new to negotiating, especially with builders, but I felt comfortable enough to do this part with or without them there.

Cost savings? ? this part I still think is (and may always be) unquantifiable. Their fee is 2% of the contract price (so in my case $15k), ?paid by the builder?. So assuming that all the builders that tendered have included that 2% in their quotes, the question is ?do I think the quotes that were returned (including the 2% going to the broker) would be equivalent or cheaper than if I was to go direct through the builder myself?? This is what is hard to measure as every project/set of plans is different. The fact that I received back two independent quotes higher than some of the broker tender responses gave me comfort in this regard.

Conclusion to date - As mentioned before I am confident I received competitive quotes, from a wide list of builders that I didn?t have to approach, and selected a builder I am happy to proceed with. I?m happy with the services they have provided and the end result. Could I ever put a specific dollar figure on the savings (if any) using a broker? No, I can?t say I could.


Next steps?wait for council to come back with their response. So next update will be in 6 weeks or 6 months. :rolleyes:
 
Thank you for the update.

Great feedback re; builder broker.

I'm currently using one is SA, with very similar feedback so far... except I haven't gone to tender with any builders yet on the recommendation of the builder brokers as still waiting council approval, could change from 3 to 2 lot.

I also used their 'inhouse' architect (after getting 5 quotes elsewhere which were all above and couldnt be matched), but my understanding is they're conducted as seperate so I own the designs.
 
Thanks for sharing.

My g/friend is also building apartments and she was shocked at the building costs, I think around 15% increase, very steep. Not looking forward to getting quotes in the near future.

Also, how are the end values holding in this area at the moment.
 
Cost savings? ? this part I still think is (and may always be) unquantifiable. Their fee is 2% of the contract price (so in my case $15k), ?paid by the builder?. So assuming that all the builders that tendered have included that 2% in their quotes, the question is ?do I think the quotes that were returned (including the 2% going to the broker) would be equivalent or cheaper than if I was to go direct through the builder myself??
Thanks for a detailed and informative post. It's great to be able to read about the process in detail. In terms of pricing/cost savings (or not), my understanding is that a certain amount of the quote cost will be set aside to either go to the broker or the builder's sales rep. As far as I know there would not necessarily be a cost saving by approaching builders directly.

To an extent, I think people get a bit hung up on price. As you know from the process you have been through, price is only one consideration when selecting a builder. In my case, one of the builders I interviewed offered a competitive price but when I looked closer at some finished houses the build quality was not appropriate for my project.

You are right about the hit rate with cold approaching builders though. I think I emailed about 15 and maybe 5 got back to me? I'm not sure if you would get a better response from an RFQ.

An option for the next project is to have the plans drafted, set your specs in writing and then approach some builders to prepare detailed quotes based on your plans.
 
Also, how are the end values holding in this area at the moment.

To be honest I have only being doing cusory online checks of what has come up and what has sold, I havent done any 'on the ground' enquiries with agents or the like since committing.
 
What info do you need to supply the builders when tendering for a job?

  • Full construction drawings (not DA drawings). Does this include all stuctural drawings?
  • Feature and Contour Survey -
  • Certificate of Title - Proof of ownership
  • Watercorp Flimsy (ASCON) drawings for showing the connection from the mains sewer into each property.
    [*]Specification - eg What type, style and number of dwellings and the level of finish.
  • Scope of Work - who creates this?
  • Schedule of Finishes - who creates this?
  • Soil report - has a large bearing on costs and slab/footing or is this taken care of during the creation of the structural drawings?

Which items above are mandatory or will help the tendering process by taking alot of the guess (hard) work out for the builder?

Do you need to supply them with a bill of quantities or is this what they calculate?
 
Actually, i think this may be the process after securing a development site.

  1. Get a soil report
  2. Engage an architect/draftsperson to produce the DA plans
  3. architect/draftsperson gets DA plans approved through council
  4. architect/draftsperson creates:
    • working drawings and structural drawings
    • Scope of Works ??
    • Schedule of Finishes ??
    • Specification
  5. Client tenders to builders with all the plans and specifications
  6. Builder produces their own bill of quantities and returns a quote
  7. Client chooses the builder
 
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