Homeowners and investors looking to renovate will be delighted that fast-rising construction costs are coming under control.
New data shows that during the three months to December, 2023, costs rose only 0.8% which was a significant fall from the 4.7% quarterly rise recorded in the third quarter of 2022.
Construction costs rose 2.9% last year, according to the Cordell Construction Cost Index (CCCI), which tracks the cost of building a typical new dwelling.
This 12-month figure is the smallest since the year to March 2007 (2.7%) and below the pre-COVID average of 4%.
Cordell said the new data indicated “the annual change in residential construction costs continued to ease as larger quarterly increases fell out of the annual calculation”.
Growth in construction costs has normalised after recording a recent peak of 11.9% over the 12 months to December 2022, Cordell said.
Construction costs have risen by more than a quarter (26.6%) since the start of the pandemic, but average dwelling value has also increased, up 36.5%.
Check out these tips if you are thinking of renovating.
Expectations
Have a realistic conversation about timelines with your contractors before the work begins. It’s frustrating if they disappear for a day or two while you live with the inconvenience of the construction. Ask your tradies or project manager to set a realistic expectation of what will happen and when.
Clear space
Remove furniture, ornaments and other belongings from the area where the renovation will occur. Don’t rely on your contractors to do this just in case of breakages.
Box it up
If you have precious items that might be damaged during the renovation, buying packing boxes and moving them far from the renovation work is a smart idea. Your tradies will also thank you.
Cover floors
Ensure your contractors are diligent when covering the floors and carpets before the renovation begins. Drop sheets are essential for protection from dirt, dust and paint spills. Significant damage can occur if floors are not covered adequately.
Work area
If your tradies are on site for more than one day, create an area where they can store their tools overnight. Most will want to recharge their cordless equipment, so power sockets will be appreciated.
Moving out
Sometimes, the disruption to your life can be so significant that finding alternative accommodation during your renovation makes sense. This gets expensive, but sometimes the cost is worth it. Consider building this into your budget, especially if you’re taking out a loan for the work.