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Why building a home in Canberra such expensive???

By flysnow - 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.

What’s Your opinion?


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65 Responses to
Why building a home in Canberra such expensive???
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sydact 8:55 pm 28 Mar 11

Have you built your home in Canberra yet? If you are already, could you please let the curious and frustrated people like me who are waiting to build on the land purchased how did you end up doing the project? I am very much interested to get Sydney builder if that is what is necessary to deal with this outrageous quote from Canberra builders. Thanks anyway for this forum at least I feel like I not alone in this!!!

cricketfan 11:59 pm 31 Oct 10

Fully agree with Chrisi, Can you tell me the names of those small builders? I hope these builders remain small builders. People want good quality, cheaper houses.By giving me the names of these small builders on this website post will make them big (hope not) cos I know a lot of people in Canberra who are fed up with Canberra builders. They charge a fortune and dont care in the name of service. I have built my house through a Canberra builder and will not go with him again.Looking for a good, honest and most importantly a cheaper builder. As a customer I want to save money (Why not?).

chrisi 1:14 am 24 Oct 10

(opps pressed wrong button)

…. but use that gut instinct of the feeling of being taken advantage of, and do something about it. Go to the big builders display homes to see what you like. Then take these floor plans and inclusion lists to a draftsperson and get your own custom designed home drawn up using bits and pieces you like. If you’re serious about building, you’ll be serious about getting these plans drawn up ($2000-3000), but then they are yours to give to any builder (big or small) to quote on.

The alternative?
Get a project home off the shelf from a big name mob, over pay for it, and see your exact house around the corner that a neighbour has as well. Dont be sucked in folks…. its the biggest purchase you’ll make in your life. It’s worth it to do your homework properly and not just rely on conditioning from the display home slicksters.

chrisi 1:01 am 24 Oct 10

Travatine, I’d be very interested to know which building company you now work for here in Canberra…. and in particular why you now work here instead of Sydney. I would hazzard a guess that fiscal benefits might have something to do with it.

Very slick arguements you’ve raised to justify the obscene price differences, and I’m sure a lot buyers who raise this issue with you are satisfied with your points, and sign up to your contracts believing the spin.

I take issue with what you said;
“I occasionally encounter a few clients who think they know it all, and then see me later with very humbled looks…” Mate, dont you think that’s a little bit condescending? Clients rightly question the huge price difference, and you make them feel stupid for daring to ask why they are being ripped off- because they are being ripped off when compared to Sydney and Melbourne prices.

You claim that Canberra builders are more fair because they include unforseen costs that interstate builders dont, and that its in fact the interstate builders in the wrong with using bait advertising. Rubbish. Please…. if anyone reading this thread wants any proof, go do a google search on AV Jennings and see for yourself. ACT prices are overinflated to the order of 50% or more for the exact same house in NSW. SAME INCLUSIONS. Better yet, next time you’re in Sydney go out to Kellywille or Rouse Hill and pop into one of the many display homes out there and ask for an inclusions list. Sure, their may be 1 or 2 differences, but believe me…. certainly not $50,000-$100,000 worth. Not even close.

It has nothing to do with “selected information” and uneducated notions of greed. It’s a fact that big name Canberra builders over charge for their services. It’s got nothing to do with extra inclusions included in the price, its because these big name builders stick together on prices and effectively control the market. When most people look to build, they go to display homes and get prices. One after the other they are conditioned to think that these prices are ‘normal’… when in fact they are far from normal.

And how can I be so sure about all this?
I’m a property valuer by profession, thats how. I see building contracts nearly every day. And I’ve seen one house built in Queanbeyan, and the exact same house built in North Canberra with the exact same fitout, and the price difference has NOTHING to do with transporting goods from Sydney or BCA requirements or anything Travatine (or any other building rep) trying to justify the prices. Sure there are minor costs relating to actual contruction and safety (for instance roof railings for roofers and planning permissions), but these costs in no way shape or form can be blamed for the price differences in the contracts.

But at the end of the day, if people are prepared to pay then they’ll keep doing it. But anyone interested in building soon and reading this thread, needs to seriously contemplate getting quotes from smaller builders. They can and will save thousands of dollars. Dont be afraid about warranty’s and insurances (larger builders will use this arguement to scare people into not using small builders)… these are industry protected, regardless of where the actual builder is in 5 years time. Do your homework and slowly slowly as more people vote with their feet and not put up with being ripped off, prices will fall. In the meantime, save yourself a stack of cash and bullcrap marketing about inclusions, and give the smaller builders a call. You’ll either get a ton more house for your money, or a massive saving.

Travatine might sound convincing

Travatine 9:40 pm 14 Oct 10

Flysnow the difference between Canberra prices quoted and the ones from inter state are different based how they use hook marketing. Canberra builders will include more in the building than Sydney or Melbourne builders. For example Canberra overhead cupboards flush to ceiling level standard – Interstate extra, Heating systems Canberra standard Interstate extra, wet area wall tiling 1200mm Canberra standard interstate extra, driveways and paths Canberra standard interstate extra, termite protection systems mandatory under the BCA Canberra standard interstae extra. I can go on fore ever.This is where the true price differentials come in, not the Greedy notion you are assumming!
Flysnow you need to get into true comparisons not selected information. I how do I know? I use to work for Sydney based building companies and now work here in Canberra and encounter a few clients ocassionally who think they know it all and go off talking to interstate firms and then see me latter with very humbled looks when they get the full contract which does not include what Canberra builders have always provided as standard.

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