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How much does it cost to build a house?

This is one of the most common questions asked, and people are rightly anxious when hearing and seeing so many numbers and figures in advertisements and the media. A number given by anybody is followed quickly (and correctly) by a subsequent question: What do I get for that? This reveals a problem with a simple answer as we cannot judge what a simple number means without the detail accompanying it.


The more comprehensive answer is that it depends on 3 main considerations:

  1. The Scope.

  2. The Specification.

  3. The Contract.

These are the three main requirements that allow you to correctly read a price number and although there may be other issues to also consider depending on the project, they will likely broadly fit into these categories. A number given without an accompanying definition of each of these is a meaningless number.


Let's go through them each in more detail.


The Scope


The scope is an expectation of what is expected within in a price. Usually this is defined by a drawing indicating what, how much, how large, or where a cost relates to. Defining it is essential, and that's why you need drawings that describe exactly what to expect when looking at a cost number.


Is landscaping included in the Scope? Is boundary fencing? What electrical services are included? Without knowing the answers to these questions about what is 'in' and what is 'out' of the price it is not possible to judge any number given. The purpose of a drawing set is to define these 'scopes' of work so the expectation is clearly defined.


So, broadly speaking, the Scope is the 'What' part of a cost.


The Specification


Next is an idea of all the items that cannot be defined in a drawing of Scope. For instance, is the contractor expected to clean up afterwards? Prepare earthworks prior? Is the price expected to include Asbestos disposal, traffic management or upgrade the electrical power supply to the building?


Any price given should state answers to these and more, and also include information that pins down expectations of standards and workmanship. For instance, are soft-closers expected in joinery, what selection of basins, tap ware and electrical fixtures should be used throughout the project? If a Scope part of the project is defined, but the Specification is not, the number in a price would be just as meaningless.


Broadly speaking, the Specification is the 'Quality' part of a cost.


The Contract


This aspect is the 'How' associated with the What and the Quality - including how long the Builder is required to build it, what are the consequences if not achieved, is there any allowance for wet weather, and how are variations, payments and assessments made. Is the contractor expected to start immediately, if so is there a time pressure, or is this flexible?


Within this category is included other procurement methods - for instance are there scopes to be determined later, but allowances made in the price? Is the price subject to change and under what circumstances? Is the project tendered out (to multiple Builders for pricing) or is there only one? Is the number given an estimate or is it a quote? Like the above categories of Scope and Specification, without Conditions of Contract attached being defined any pricing number is similarly meaningless.


The Contract part of a price given is 'How' the Scope and Specification would be completed.


Conclusion


Now you know how to judge a price if you are given one, and what to consider when comparing prices. Make sure you have an idea of the above three aspects that a number relates to, so you could make sense of it.


So how much does a building cost? Without detail it is possible to say anywhere from $1500 to $3500 / sqm, depending on scope, quality and time. Any price or rate needs a set of drawings, specification and conditions of contract to be useful to you.


Hubble Design can assist you in creating the above documents for you, incorporating well-suited and thought out design too. Call or email us at office@hubble.com.au now regarding your project.

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