Making Sense of "Site Costs"

Site Costs can be one of the most frustrating aspects to building a home with a volume builder, as they can often appear to be a bucket in which you tip large sums of money for almost no visible result.  So I thought it would be a good idea to give an overview of what goes in to site costs, so that you can at least understand why this bucket is so large.


By the way, if you are reading this hoping to find a way to reduce your site costs, sorry, they tend to be hard to avoid.

 

In order to understand why site costs can be so high, it is important to understand where they come from.  Here are some of the most common things that make up what builders call 'site costs'.

 

Temporary Fencing - This will typically run across the front of your block to stop people from getting in.

 

Crossover Protection - This is protection of the bit of your driveway that crosses from the footpath to the street.  Your local council will require your to pay for its replacement if it is damaged.

 

Site Levelling - Builders expect your block to be flat and if it is not flat, they need to make it so.  They usually only allow for a slope of 300mm across the site, from front to back and side to side - realistically, very few blocks are this flat.

 

Construction of Retaining Walls - If your block needs to be flattened in order to accommodate the concrete slab, this may require the creation of retaining walls.

 

Traffic Management Plans - A traffic management plan may be required if there is public transport near your house (there is a bus stop right outside our site) or if there are schools nearby with children coming and going.  A traffic management plan will also be required if you live on a busy street.

 

Cranes - In some cases, materials will need to be lifted on to your site by way of a crane.  This is not uncommon where there are power lines on your side of the street or where access is limited.

 

Double-handling - If a truck delivering materials cannot get access onto the site and unload directly to where they will be stored or installed, then double-handling occurs.  The truck needs to be unloaded and people need to carry things around.  This extra labour attracts a cost.

 

Piering for your Slab - Most volume builders quote on providing a 'M' Class slab, which assumes that your land is flat and relatively stable (see here for more information on this).  If you require piering,  then this will be part of your site costs.

 

These are some of the key things that will be considered when your site costs are quoted.  They are a function of the site that you have and there is relatively little you can do about these costs.

 

And Now for a bit of a Rant...

Another cost that is sometimes on quotes is a premium, based on the suburb in which the house is being built.  Builders justify this on the basis that tradies need to travel further in order to build your house.  I am highly sceptical of this argument for several reasons:

• I've lived all over Melbourne and in several other cities around the world and I have found a relatively even distribution of good trades people.
• (for the builder that I have looked at this closely) the map of which suburbs pay these premiums is not based on average distance from any particular point or location.
• Not all builders apply this sort of charge.

In reality, the maps I have seen more closely resemble a  map showing zones of (perceived) suburban affluence.  Therefore I have reached the conclusion that these charges are a "we think you can afford to pay more, so we will charge you more" premium applied by the builders, without even the courtesy of hiding it away in other costs and charges.

 

 

Volume Builders Quotes (Part 1) - Comparing Things That Matter

Reading through a sales quotation presented by a Volume Builder can be very confusing.  If you are trying to compare quotes from two or more builders, you will have the devil's job coming up with meaningful comparisons.  We have just finished comparing quotes from 3 three different builders and it took hours and a huge spread-sheet to distil everything.  In the end, it was impossible to come out with an 'apples' to 'apples' comparison, but the attempt to compare the details on a line-by-line level across different builders and houses yielded some really interesting points of comparison.

So I thought I would start a list of details that are important to look for in the quotes presented by volume builders.  I'll add to this list as I think of more things.

Site Costs

Make sure your site costs are realistic, particularly when considering the cost of the slab and site access.  Our house is a knock-down/rebuild project and while two of the builders quotes we have reviewed based the cost of the slab on a P-Class slab, the third was based on an M-Class slab, which made their quote cheaper by about $25,000, but almost certainly unrealistic.

Cement Sheet In-Fills

Cement Sheet in-fills above windows and doors - This is more about the appearance of the house than its structure.  Cement sheet is used by builders as a quick and easy way to fill the gaps above windows and doorways.  If you like it, fine.  However, brick in-fills generally look better.  Be especially careful where there are cement sheet in-fills on the front façade of the house, as this will affect the overall appearance of the house from the street.  In particular, it is worthwhile working out if there is a cement-sheet or brick in-fill above your garage door.

A Cement Sheet In-Fill above a Bi-Fold Door.
Would bricks look better?  I think so.

Eaves

Some builders include eaves as standard, but many do not.  Eaves give the roofline of the house its character and give the house its overall house 'shape'.  Eaves require extra materials (timber, tiles etc.) and extra labour, all of which means extra costs for builders. While some builders include eaves as standard, some also only include the eaves as part of the façade.  This can be a cost-saving compromise, which gives the house an attractive outline from the street, but is not suitable for corner-blocks.

Skirts and Architraves

Many builders use 45mm skirts architraves as 'standard', which is probably ok for tiled floors or timber floors.  However, in carpeted areas of the house, the height of the underlay plus the thickness of the carpet can easily be 25mm or more.  This creates a visual effect (and you won't see this in display homes, which use higher skirts) of skirts that appear to barely poke above the carpet.  It is probably a good idea to check that you have at least 70mm a skirts in carpeted areas of the house (if not all the way through) so that they look right.  Also, make sure your architraves are the same width as the height of your skirts, otherwise your door-frames will look out of proportion.

Flyscreens - Flyscreens are a necessary item in Australia.  Make sure they are included.

The First 5 Things You Should Know About Building with a Volume Builder

Ok, so I probably should have posted this information earlier in the process we are going through, but hopefully it can help people getting started in the house-building process.

 

If you are engaging a volume builder to build your home, then here are a few truths that are worth keeping in mind, so that you understand what is important and what is not.

 

1. Despite Appearances, You are Building a Timber House

It is highly likely that your new home will have brick exterior.  However, the house itself is supported by a timber frame and, so, from an engineering perspective, it is more correct to say you are building a timber house with brick cladding.  This is true in nearly all volume-built houses.  The bricks give it a nice appearance and help keep the weather out, but they offer no structural value whatsoever to the house itself.  This is important because timber is a natural product and, over time, it will move.  In the years to come, this can result in cracks in plaster and other damage and (within reason) these are inevitable.  To complain about this (as I see many people doing in on-line forums) is a bit like complaining that your tyres get worn out when you drive your car.

2. Volume Builders only Build Houses on Flat Land

Your land needs to be flat, or flattened - volume builders do not take any slope on your land into account and the house is not modified to meet the needs of the land.  Rather, the land needs to modified to meet the needs of the house.  This can be a significant expense under the heading of site costs, as even a gently sloping block can require excavation, retaining walls, and levelling before work can actually commence.

3. The Load-Bearing Walls are the External Walls

Nearly all new homes built nowadays use the exterior walls (rather than internal walls) to carry the weight of the house and the roof.  There are lots of reasons for this, but as a home-owner, one of the main benefits is that you can have large open living spaces.  This is also the reason that the sales people will be happy to discuss changing the interior wall configuration of the house and the costs will often be (relatively) low.  If the interior walls do not do anything for the structure of the house, then moving them, re-configuring them, adding extra doors to them (and so on) will not materially impact the structural integrity of the house.  By contrast, changing the exterior wall configuration will change the roof-line and structural support for the house and costs will rack up quickly as you make these sorts of changes.

4. The "Base Price" is just a starting point.

The Base Price of a house in a Volume Builder's catalogue provides the most minimal and rudimentary version of the house and you can be assured that it is absolutely nothing like the display home you might have wandered through.  By the time you have made the home attractive and liveable, you can expect to have added somewhere between 30% - 60% of extra costs onto the house.  And this will almost certainly not include driveways, landscaping and other things you will need to budget for.

5.  Some Builders May Not Want to Touch Your Block of Land

If you have:

• an irregular sized block
• trees
• power lines
• a busy road
• schools nearby
• or public transport nearby

then it will be important to get the builder to inspect your property early on and confirm that they are happy to take on the job of building your house.  Volume Builders are successful because they work on the basis of producing a relatively standard product over and over again.  If your site looks too hard or complicated, they may simply refuse to build your house. 

Enjoy!