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Why building a home in Canberra such expensive???

By 22 March 2010 65

I am a new in property market and bought a residential land in the Gungahlin region. Now those days I am busy to traveling from one display home to get some design idea and most important, to find the cost of building.

And guess what? I was so surprise about how greedy and outrageous of the building cost charged by Canberra builders to local people. For example, for a double story home, looking about 220sqm (inclusive of area of Garage), 4 beds, 2 bath, double garage, the start price is around $340K. This price does not include any flooring or front landscaping cost, which you have to pay about more than $20K on top of the start price, also, there may be lots of things not in the standard inclusion list, e.g. gas cook top, change ceiling height from 2.4m to 2.7m, etc. Which means at least you probably look to pay $360k-$400k. That is about $1,500 – $2,000 per sqm !!!!!!!!

Ok, in the mean time I surf many Sydney and Melbourne builders’ website and still for the above house package, start price from $230K-$240K, and with all the upgrades, flooring and front landscaping, total price just over $250K. Example like one of my friend in Melbourne just signed contract with his builder, total area of 358 sqm and total price only $320K, that is about $900 - $1,000 per sqm !!!!!!!!!!!

So how come Canberra builders can charge 50%-100% higher than Sydney or Melbourne builders? Anyone know the reason? DO NOT TELL ME IT IS BECAUSE THE DIFFERENT BUILDING REGULATION FROM STATE TO STATE.

Sorry about the gossip as I feel so angry about the Canberra builders. Rumours I heared before was builders in Canberra make $180K profit from each home they build, and I think builders from Sydney and Melbourne will never dream about to have this high margin on their project.

My final comment: anyone saw this post and is going to build their Australian dream in Canberra, let us work out something together just being not to ripped off by the local builders. If we can put our block of land together and attract some Sydney builder to Canberra to build for us, even there is many additional cost e.g. transportation, I think it is still worth to try it.

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65 Responses to Why building a home in Canberra such expensive???
#1
housebound9:48 am, 22 Mar 10

http://stonehomes.com.au/double-storey.php

Couldn’t be worse than we alrady see around Canberra.

#2
Tony9:54 am, 22 Mar 10

People are willing and continue to pay these high price, as such, that is the price the market has set.

http://www.canberratimes.com.au/news/local/news/general/canberra-tops-in-prosperity-poll/1782445.aspx?src=rss

#3
DeadlySchnauzer9:58 am, 22 Mar 10

Additional material supply costs. Canberra builders have to ship in materials from Sydney or Melbourne. If you get a Sydney builder to come to Canberra, they will be facing those same costs, and will charge you more.

Then you get to the trades shortages. Canberra has a relatively smaller pool of tradesmen (blame the cost of living here), so they can charge pretty outrageous prices, which the builder has to pass on to you.

It would be an interesting experiment to get some quotes from out of town builders and see what kind of price you get. They will definitely not give you melb/sydney prices, but you may get cheaper than canb builders. Don’t know if anyone has experience with this?

#4
captainwhorebags10:02 am, 22 Mar 10

Why does it cost so much?

Because you’ll pay it. And if you don’t, someone else will.

#5
Holden Caulfield10:42 am, 22 Mar 10

If it makes the OP feel any better it’s going to cost us around the same to renovate our 1950s home and extend it with a dbl garage, ensuite and living area. So much for our 200K budget, haha.

At least you will be getting a brand new home!

#6
Skidbladnir11:58 am, 22 Mar 10

If you want a comparison, courtesy of BMT Quantity Surveyors.
http://www.bmtqs.com.au/construction_cost_table.htm

They use Sydney as a basleine and then give percentage ranges for locations, Canberra gets 96%-104% of Sydney costs.
Residential
3br brick veneer project home, level block, shelf design
Low-cost finishing $980
Median-cost finishing $1,250
High-cost finishing $1,580

Architecturally designed executive residence
Low-cost finishing $2,100
Median-cost finishing $3,250
High-cost finishing $4,900

3br, 2 level brick veneer townhouse, including allowance for common property
Low-cost finishing $1,260
Median-cost finishing $1,480
High-cost finishing $2,200

3 level walk-up unit complex, concrete structure ground floor parking
Low-cost finishing $1,420
Median-cost finishing $1,700
High-cost finishing $2,200

Multi-level apartment building, including lift and basement car parking
Low-cost finishing $1,600
Median-cost finishing $1,970
High-cost finishing $2,940

#7
flysnow12:23 pm, 22 Mar 10

Thanks Skidbladnir , that is quite interesting information. As using Sydney as 100 base, Canberra is at the range of 96 – 104. However, the reality is residential building cost is 50-100% higher than Sydney, so if we use Sydney as 100 base, then Canberra is in the range of 150-200.

People are right about the material cost as material needs to shift from Sydney. However, I do think this will increase the cost by 50-100%, the additional transport should be only within 15% of the value of the cost, talking about large quantity of material. Ot

Labor cost is another reason, but under the apprentice scheme which every state government support, Canberra should have similar rate as Sydney and Melbourne. But labour shortage is another storey, while no apprentice available, builder have to hire more expensive contractors.

Overall, I still do not understand how come Canberra residential building cost so much higher. But one thing is true, this is small country town, demand is little and competition is minor, so that is why builders in Canberra can charge whatever they want.

For my own case, I will seek independent smaller builder to build my house, because even large builders they can not always be trusted. Plus, if I can gather more people to join with me, then there is a chance to ask Sydney builder to Canbbera to build for us with lower cost.

Finally, all Sydney builders, you are more than welcome to Canberra to bring the competition!!!

#8
sloppery12:36 pm, 22 Mar 10

Ask around for more quotes. There are builders with not enough large jobs on at the moment, and you will find one that will do it for a better price. Also, ask the builder about ways to reduce the cost by using different shapes or sizes of rooms. Bear in mind that many bulding contracts include an allowance for things like tiles, bathroom furniture, kitchen, etc, and as such these are areas where significant savings can be made.

#9
Gungahlin Al12:40 pm, 22 Mar 10

It’s absurd isn’t it that they only give estimates for brick veneereal?
Brick is the last thing you want to build an external skin out of here. (Anywhere in Australia actually.)

There are other materials out there…

I think CWB summed it up fairly succinctly.

But there are things you can do. Perhaps you need to stop and think about whether you really need that 4th bedroom? Assess what you need, as opposed to what you want (or worse: what the industry has convinced you is the minimum now).

And can you reconfigure the layout to reduce costs – like having one big open plan living/kitchen area. Design your bathrooms so that you don’t need shower screens – saves money, reduces cleaning costs and chemical use.

A key thing is to include up front the positives that can never be added afterwards – like hydronic heating instead of horrible ducted gas, piping your whole roof to the tank, better base materials selection, better windows, slab edge insultation. All of these things make for a more comfortable, and cheaper to operate home. They are all ‘no regrets’ options.

And remember to leave money for a proper landscape design up front (not the crap the building designer gives you to pass the DA). This will allow you to factor in requirements during building (like conduits under drives/paths, electricity supply for lights/ponds, gas supply for barbies, courtyards, and more). Money up front that will save you heaps down the line.

There are good resources around. I’d suggest the display homes are one though.

#10
The Axe Man2:30 pm, 22 Mar 10

Try Goldruby. http://www.goldruby.com.au/
They don’t do display homes though.
They also don’t charge for getting your own appliances or making modifications

#11
hax2:41 pm, 22 Mar 10

I suspect you’re not comparing apples with apples.

Besides, there are a number of ‘Sydney builders’ already in Canberra..

Canberra builders prices are more realistic and include most of the actual cost up front, so no need to spend an extra $50k-$100k when your house is ‘finished’

I would be interested to see the exact inclusions and specifications for the houses your basing your comparison – do they even include council fees, water tank, insulation etc..? (I think you’ll find some major discrepancies)

#12
troll-sniffer4:29 pm, 22 Mar 10

220 sq m? Sounds like a fully-fledged McMansion to me. You could downsize to fit into your budget, there’s a thought. Previous generations managed on much smaller homes.

#13
CoffinRX26:18 pm, 22 Mar 10

Maybe you should have looked into this prior to buying a block of land?

Supply and demand, materials costs and shortage of skilled labour all contribute to higher costs. …. deal with it

#14
JC6:23 pm, 22 Mar 10

Tend to agree the price is way too high. I had my house built in 2000 (after the GST was introduced might I add) for $101,000. My place is 12 squares+garage=(150m2) or $673m2. It is a medium finish house, so based on the prices above the costs have doubled in 10 years. What else has doubled in 10 years, certainly not my wages!

#15
georgesgenitals7:11 pm, 22 Mar 10

It costs what it costs. Instead of building something that big, try starting with a smaller property then moving up as and when you are ready. If you CAN afford this now, why the whinge?

#16
Holden Caulfield7:53 pm, 22 Mar 10

JC said :

Tend to agree the price is way too high. I had my house built in 2000 (after the GST was introduced might I add) for $101,000. My place is 12 squares+garage=(150m2) or $673m2. It is a medium finish house, so based on the prices above the costs have doubled in 10 years. What else has doubled in 10 years, certainly not my wages!

Erm, probably the price of your house! Actually, I would suggest it may have increased by over 200%.

We built in Nicholls in late 99, got the keys in January 2000 and our 3 bedroom home of around 175m2 cost us approx $130K. Land cost for our 680m2 block was just over $70K. We sold in mid-2004 for over $420K. You’d reckon it would be close to $600K now, or approaching three times the price we paid for house an land a smidge over 10 years ago.

#17
Woody Mann-Caruso8:49 pm, 22 Mar 10

oh noes my mcmansion is expensive why i get the penalised by the bad canberra builder i entitled to cheap house

Why don’t you just MOVE TO SYDNEY already?

#18
pptvb8:55 pm, 22 Mar 10

You bought a block in Gungahlin.
Enough said.

#19
Mimiboo9:05 pm, 22 Mar 10

Yup, houses here are overpriced. Have to agree with Axe Man – we went though Gold Ruby who are upfront with costs and how much they add on to the total. And their prices were fairly reasonable compared to other builders. Just make sure that the communications between you and Goldruby are clear, then you shouldn’t have any problems with them.

#20
flysnow10:20 pm, 22 Mar 10

To reply hax in level 11, I checked both standard inclusion list from Sydney and Melbourne builder compare with Canberra builder, surprise to say Canberra builders’ cost is even not close to realistic, as things like flooring coverage, gas cook top etc which included in Sydney builders standard inclusion list but not in Canberra builders’ standard inclusion list. Which means you pay extra to get those suppose to be the standard feature of your house in Canberra.

220sqm is the max size of house we can build on our block, this includes double garage which take away 36sqm-40sqm, left with 180-185sqm for actual living size. Thanks for the stupid plot ratio of 50% restriction, people can only build half the block size house but for a big family, I do not think this is reasonable. Actually I think it is not reasonable at all, as why can not we build up to 60% or 70% of the land area, for a 500 sqm block, 30% outdoor area still means 150 sqm, isn’t that enough?

Some people say I did not compare apple with apple, then I suggest them to go some large Sydney or Melbourne builders website to check the price, there are:

Eden Homes (Sydney)
Rawson Homes (Sydney)
Port Davis (Melbourne)
Burbank (Melbourne)

After check the price, go to Crace display village to ask the standard price for the display homes, then come back to let me know whether you find Canberra builders are outrageous.

#21
Up The Duffy10:20 pm, 22 Mar 10

“The Croatian Building Cartel” and the fact that they own the ALP and run the Libs in the ACT.

Some poor Real-estate agent tried to take them on in Harrison a couple of years ago and came out 2nd best. (Named Z … Something?)

Just don,t buy their over-priced poorly build houses, and live in a over priced house in a older suburb closer to Civic instead.

Its just one of the pitfalls of living in the Village of Canberra.

#22
flysnow10:34 pm, 22 Mar 10

To reply georgesgenitals level 15, sure I can afford, I just do not want to be ripped off. I believe most of us here made hard saving for the past years to build their dream, and when you find you need to much more extra to build in Canberra something similar as Sydney or Melbourne, do not you think it need to question why? Then probably you find all your hard saving is gift to local builders.

If we kept quiet and just think this is normal economic cycle and property price should go up and up, building cost should up and up, there is no other reason but purely economic cycle, then I guess our kids may be need to rent for the whole of their lives.

I think now it is time to change the direction of the topic. Can people start to share their building experience and recommend some good Canberra builders?

#23
p110:39 pm, 22 Mar 10

flysnow said :

Thanks for the stupid plot ratio of 50% restriction, people can only build half the block size….

Holy Crap!!!!111!!1

My block is just shy of 1200sqm, and our house is something in the order of 120sqm. 50%? WOW!

#24
CoffinRX210:44 pm, 22 Mar 10

Pretty much since the bushfires, cost of labour went up as there was a huge demand for skilled labour. … I’m good mates with an estimator who works for one of canberra’s big builders, and I’m looking at doing some work on my current house. it unfortunately costs what it does to do work here, simple as that.

#25
SolarPowered11:06 pm, 22 Mar 10

pptvb said :

You bought a block in Gungahlin.
Enough said.

Sydney Snobbery is alive and well and living wherever the hell you live.

#26
shauno11:46 pm, 22 Mar 10

At least its cheaper then the School building scam set up by Rudd making instant millionaires by contracting labor mates to build covered basket ball courts and halls at $11,000 per square metre. I look forward to the Royal Commission on this and other scams once Rudd gets kicked out.

#27
JC4:47 am, 23 Mar 10

Holden Caulfield said :

Erm, probably the price of your house! Actually, I would suggest it may have increased by over 200%.

We built in Nicholls in late 99, got the keys in January 2000 and our 3 bedroom home of around 175m2 cost us approx $130K. Land cost for our 680m2 block was just over $70K. We sold in mid-2004 for over $420K. You’d reckon it would be close to $600K now, or approaching three times the price we paid for house an land a smidge over 10 years ago.

Yes, good point, my place has gone up in value by about 3 times. My land cost $50,000, and the whole place now valued at a tad over $400k. This is all well and good, except that rise is on paper only.

The example I guess goes to show why it is so expensive to build now. Basically the cost of established houses has gone up due to lack of supply in the new home market. This has lead to builders charging what they want, thus keeping existing home prices high, thus builders charging what they want, thus forcing existing home prices up, etc etc. Something has to give when it gets to the point where no one can afford to buy or for that matter rent. We cannot be that far off. I mean to say when I built in 2000 the mortgage was less than 3 times my then income which was $60k. In those 10 years through promotion I now earn $100k but to buy the same ENTRY level place would cost over 4 times my income. Though of course with a higher mortgage comes a higher level of interest to pay (in real terms not %) which means the cost of repayments for the same place would be closer to 5 times. Simply not affordable.

Also not affordable for me to upsize and due to ridiculously high building costs not viable to extend. In fact probably cheaper to knock down and rebuilt, crazy for a 10 year old house.

#28
Holden Caulfield8:38 am, 23 Mar 10

@JC, yes, you’re right, rising house prices isn’t all beer’n’skittles. Still, better to have bought when you did than to be faced with the prospect now.

#29
Pandy9:25 am, 23 Mar 10

Melbouren prices all show gift inclusions of something around $50,000 for a fancier kitchen better bathroom fittings on standard dsiplay like houses. But when you ask them, what is the price for the house as displayed (sans landscaping) they will say oh thats another $100,000. So maybe your so called afforadable houses in melbourne are a furphy

#30
s-s-a9:49 am, 23 Mar 10

Pretty much since the bushfires, cost of labour went up as there was a huge demand for skilled labour

I am surprised only one PP has mentioned the mentality floating around after the bushfires. A mate who is in the building trades was begged to come down here from Sydney by several companies, all of whom offered a variation on the theme “you can charge what you like because the insurance companies are paying for it”.

That put the prices up and they haven’t gone back down again.

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