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How To Plan Around The Rise In Construction Costs

The construction industry is experiencing a lot of commotion at present – labour is in demand, supplies are scarce and construction costs are rising. Does this mean the end of your dream home project? Not at all!

You can still build the home of your dreams, by updating your strategy and working with the changes in the market.

Below, we’ve listed our 6 top tips for tackling the battle against rising construction costs, so you can still bring your next project to completion.

1. Act fast

Efficiency is key to proceeding with your construction plans when trying to outpace the rising costs. Being prepared means being able to swiftly take advantage of the right opportunities when they arise. Do this by having all your plans, documents, permits and funding for the build ready from the outset.

If you don’t already have plans, you can take advantage of a more streamlined approach to building, such as a Design & Construct service. With one team overseeing the project, greater budget control and an overall faster timeline for your construction, you can take advantage of the current climate and be ready to build once the industry settles.

2. Talk with your builder

Constant clear communication with your builder is a must. Discuss their strategy for sourcing materials and how they’re factoring pricing increases into their estimates. Wherever possible, lock in pricing and quotes early to ensure that the proposed pricing can be upheld for the duration of the project.

3. Be realistic on timeframes

The increasing scarcity of supplies and growing labour shortages seen nationwide are drawing out build times. The more flexibility you can offer with your timeframe for the project, the less stress and money you will expend. Consider your living situation and contingency plans; be adaptable to the increasingly unpredictable market.

4. Know your finances

Unexpected costs and changes in scope can occur on any project, so it’s always best to plan ahead for these and ensure you don’t overextend yourself financially. Consider the upper limits of your budget, what is feasible, and keep this front of mind.

Ensure you communicate with your builder on budgetary concerns – particularly worst-case scenarios – and take the entire project into consideration.

Ultimately, you need to ascertain whether the house you want to build, including the quality of fixtures and finishes, is within your budget at present.

5. Consider the benefits of a fixed price or cost-plus contract

Both have their merits and both can lead to lower costs for your build, under the right circumstances:

  • Fixed price contract – The standard contract for most builds. The builder supplies a quote, usually with some margin for pricing changes, and you pay the price agreed upon. It’s the most straightforward contract, however, you are paying extra for factored-in contingencies that may or may not arise throughout the project.
  • Cost-plus contracts – While only available for contracts exceeding $1,000,000, the cost-plus model can lead to a lower overall price. There’s more administration required as you’ll need to oversee the build and all ongoing costs to ensure your project stays on budget. However, should the build go to plan, you won’t be paying for pre-set contingency plans.

6. Be open-minded

Much like your timeframe, if you’re flexible with your expectations on the materials and methods used during the build, you open yourself up to more possibilities to proceed.

While some materials are becoming harder to procure, innovations in building technology and an increasing catalogue of alternative materials are presenting as cost-effective solutions. Whether you consider a steel frame over timber, or precast panels over in-situ, there are plenty of options to make your build viable.

Be open-minded with your vision for the final product and you will find a cheaper and quicker project completion is your reward.

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Get in touch with the expert Cobalt Constructions team – we’re happy to talk you through your options and build your dream home today.

Get in touch with our team and experience the Cobalt Constructions difference today.

Cobalt Constructions