The rising cost of construction materials is finally coming off the boil.
And that spells good news for house-and-land package buyers and those prepared to purchase either vacant land or demolish an older home to start again.
The price pressure on construction materials began in June 2019 and hit the headlines during Covid. Quarterly price hikes of up to 5.7% were experienced due to supply chain challenges and material shortages.
But the September quarter inflation for construction materials was just 0.5%, according to CoreLogic’s Cordell Construction Cost Index.
The latest result is the fourth successive fall in the cost of construction materials. However, this trend does not mean building materials will return to prices offered before Covid.
CoreLogic observed price pressures were now shifting from materials to labour costs due to a 5% increase in award rates and a 0.5% rise in the superannuation guarantee rate to 11%.
While the news may spark a renewed interest in renovating your property, it is always wise to explore all the options.
Upgrading doesn’t always deliver the results you hoped. Here are some risks:
Budget blow-outs
Unexpected expenses are common in a major renovation, that’s why the experts suggest you put aside 10-15% of the overall cost for unforeseen problems.
Scope creep
Unless you’re disciplined, you’ll likely make small alterations on the fly, such as your choices of materials and finishes. Changes to the original plan often make the project more expensive.
Right hires
Success of a project relies on your ability to hire quality contractors. If you get it wrong, you could face a world of pain with contractors who lack communication skills and a consultative approach.
Project management
It’s tempting to want to be the project manager, but how much do you know about building? It takes a lot of time and requires more than communication skills. If you have the budget, ask your architect to take on the role.
Question of quality
Cheap materials and shoddy workmanship are often major issues for owners trying to ensure the project delivers on their vision.
Frustration factor
Delays are common, and many owners have experienced the unexplained absence of workers for days on end. Often contractors have more than one job on the go at any one time. You may also have to wait for building materials to be supplied.
Dirt and dust
Renovations upend your daily routine if you live on the property while work is conducted. Getting through your day surrounded by dirt and dust can be tiring. Consider renting while work goes on, but that’s another cost and finding rental properties isn’t easy these days.