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Building Industry Update of 23 September 2014

BY Jennian Homes

Mercury Bay and Tairua-Pauanui | Mon September 22, 2014

Last month we spoke about establishing your true building budget to ensure you have enough funds in the kitty to fully complete your dream home. Now that you know what you have to spend on the construction of your home, maximising the value within your budget becomes the next problem to solve. What you really want to know is that at the end of this exciting adventure you can move your family into the home you’ve always wanted, on time and within your budget with no unwanted surprises.

To achieve this, you should know exactly what your home will cost to build before you sign the contract and long before the construction commences. But how do you compare one builder’s price to another? How will you know that you are comparing the proverbial apples with apples?

Firstly, try not to get hung up on "square metre rates" as these are largely irrelevant in the greater scheme of things. House size, shape, specifications, kitchens, bathrooms and all manner of other factors will determine the cost of your home. There are several tangible areas that you can look for to help you determine the true value behind the prices you are presented with.

Prime Cost (PC) and Provisional (PS) Sums are an area where surprises regularly occur. These amounts are often used as an estimate for a particular work or item in the building contract where the actual amount is not fully determined. For example, a builder may allow a PC sum for a standard kitchen design, but the homeowner may in fact want something different to what has been allowed. Or a PS sum may be allowed for excavation if the builder is unable to determine the extent of the works required prior to commencement. It’s important to make sure that the value allowed for the PC or PS Sum is accurate in relation to the expectation you have for the item or work being specified.

Another area where false savings can be hidden is behind your wall linings. The wall frames, insulation and plumbing should always be compared to ensure you are getting the best value for the dollars you’re investing. Don’t look for minimum standards in this area, as spending a little more on the quality inside the walls will protect the value of your home for many years to come and save on long term maintenance costs.

Similarly, the fixtures, fittings and fashion items in your home can have a similar effect. Look for well-known suppliers and manufacturers with recognised brands that are supported in New Zealand. This ensures you have the best quality to begin with backed by after sales service and applicable warranties and guarantees. It might seem like a cost saving at the outset to go with cheaper items, but inferior products are likely to cost you more in the long run.

If you arm yourself with the right information when comparing the price of Builder X with Builder Y, you can make a more informed decision about where your build budget is best invested. The cheapest is rarely (if ever) the best value proposition.

Ask the right questions and soon you’ll find that you are actually separating the apples from the lemons.

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