Build Update: Lessons from trying to build

I’ve had a few readers ask about my build progress and as of 2 weeks ago I can now answer; abandoned. We went through a number of designs with a new company and after pricing the one that worked for our preferences and land came in at $200,000 over budget.  Now this was a budget that has increased substantially since the start so at that point we admitted defeat and have now sold the section.

Reviewing the 5 most recent architectural/custom builds (including my own) I’ve been involved with have revealed the following:

1. Only 1 of 5 came close to the initial brief/build budget.
2. 50% above budget was the highest
3. At no point was anyone told the budget was unrealistic or not enough at the onset
4. Cost per SQM seems pointless as there are is often exclusions which can be in the 10,000-$100,000s. When discussing a budget in future I would refer to it as “turnkey” to incorporate all costs
5. If re-visiting I would write into a design contract full refund if design does not meet brief or come within 10% of budget as there is no real penalty for designing a substantially more costly house.

If you are considering a custom build be prepared to double your budget to get the house you really want (just don’t reveal that figure).  Of the five builds in all cases compromises were made due to cost.

As the buyer has to pay GST it’s absurd most pricing is done excluding GST. It might have relevance within the building industry but it should have none to the consumer and can potential create quite a bit of confusion when pricing is done without GST.

If budget is a concern the onus is on you to really ride the design team, a worthwhile exercise would be involving a Quantity Surveyor at the start of the design.

With a build you can have a designer/architect, builder, engineer, QS and yourself, so a lot of people with often varying opinions meaning pricing can get very difficult. It would be worthwhile establishing these individuals at the start and to have them communicating.

Finally I would say building comes at quite a premium to purchasing an existing house and it might take a long time to recover your money if you were to sell. If you are considering a custom build I would say intend to be there for at least 5 years, if not longer to recover your costs.

The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.