Price rises and home renovations in Melbourne
It is true, construction costs are rising in Melbourne.
It is impacting every builder and every job – from bathroom renovations to new builds.
This article will consider what is happening? Why are prices rising? How will it affect your home renovation? And what can you do about it?
Why are construction costs rising?
There are two forces at work that are driving up the costs of renovations and extensions in Melbourne. One is the cost of materials. The other is the availability of labour.
Like a lot of things at the moment (petrol! Electricity! Lettuce!), the cost of building materials is skyrocketing. There are many reasons for this. Here are just a few:
High global demand for building materials coming out of the COVID-19 pandemic;
A shortage of timber globally caused by natural disasters, including fires in Australia in 2019-20;
A rise in the cost of steel as builders turn to steel to replace structural timber and local steel manufacturers run at capacity;
Supply issues for construction materials manufactured in China, due to lockdowns, and Russia, due to sanctions.
The building industry is also being affected by the same skills shortages that are plaguing hospitality, retail and healthcare. Put simply, we cannot find enough tradies to do the work. This is driving up prices as the staff we have are working overtime, or moving around seeking the best wage. Did you know the Queensland Government is paying relocation costs for tradies who move to the Sunshine State? It sure makes it hard for employers asking those same trades to work through the Melbourne winter.
How will these price rises affect my renovation or extension?
Renovations and extensions in Melbourne are costing more. Hanson Building is paying more for timber and more for imported materials. While Hanson Building will try and absorb as much of the price rise, some of it inevitably gets passed on to our clients.
In addition, prices are not stable. They are rising regularly. What this means is that if we quote your renovation in March, but you only decide to go ahead in September, the price will likely increase over that time. Regrettably at the moment, our quotes are truly only valid for 30 days.
Rest assured though, Hanson Building is putting in place practices to mitigate price rises, including buying and storing timber in advance to avoid price rises, and working with trusted suppliers to get our clients the absolute best price.
What can you do about it?
Here are some tips for managing price rises if you are planning a renovation or extension:
(1) Use a trusted architect and be clear about your budget. Your architect should understand the state of the industry and factor likely price rises when drawing up plans. Be aware though, you may get slightly less for your budget than you anticipated, but there are ways to save. Speak to your architect or to Hanson Building for some tips.
(2) Spend on showpiece items, save on details that matter less. Write a list of must-haves, and a list of nice-but-not-essential, and allocate your budget that way.
(3) Consider breaking your project into stages. Maybe you really need the extra space so an extension is essential, but upgrading existing bathrooms can wait? Maybe you were hoping to include a pool and landscaping when you renovated, but perhaps that can be put off for now?
(4) Beware of the too-good-to-be-true quote. Dodgy builders are underquoting to try and win work, but then cutting corners once they get the job so that they don’t lose money. We have seen horror stories of brickwork left incomplete, poorly sealed plumbing and painting where the single coat of paint is so thin the bare plaster is still visible.
If you would like any more information on construction costs, or a realistic and fair quote for your extension or renovation, contact Hanson Building.