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What we are doing to combat the state of the construction industry landscape


 

Alongside a house price boom, Australia is in the midst of a homebuilding boom with the Housing Industry of Australia expecting that a near-record number of new homes will be built over the next 12 months.

But for many in the residential construction sector, it’s a profitless boom – and several major players have recently gone bust, with the assumption that more will follow.

Why are construction companies folding?

A perfect storm of factors has been brewing for the better part of 2021, and now the rainy season has arrived.

Supply chain issues, with a shortage of building materials worldwide resulting from COVID-19 disruptions, coupled with natural disasters from freak storms and flooding to bushfires, have provided significant pressure on builders.

Those shortages have led to prices rising exponentially, particularly for timber and steel.

On top of that, a labour shortage is making it difficult to find tradespeople, giving workers the power to command huge wages.

So, the overall cost of construction has been pushed up significantly.

A number of major builders have gone bust in recent months despite a home construction boom. Picture: Getty Images


Adding to this is the lengthy delays in actually getting the materials, which has led to some homes taking more than 12 months to be built, further adding to building companies’ costs.

With the majority of builders signing fixed-price contracts with buyers, and the margin for escalating costs being inadequate, many are losing money on every single project.

It’s a big problem in exceptional circumstances like we’re seeing at the moment, said Russ Stephens, co-founder of the Association of Professional Builders.

“The average cost of a contract for a builder has gone up between 15% to 20% over the past six or seven months alone – and up to as much as 50% in some areas,” Mr Stephens said.

Australia is in the midst of a residential construction boom, with a near-record number of new homes to be built in the next year. Picture: Getty Images


What we are doing to combat the state of the construction industry landscape

32 Degrees Building has been operating for over 11+ years, and we know and understand how to manage our business in turbulent times.

We have been working with our team and talking directly to our suppliers to manage and understand any upcoming supply challenges and supply chain issues. We have been working with our timber suppliers closely to understand their difficulties in obtaining overseas supply and then managing, monitoring and forecasting for our current and future builds. Skills shortage for us isn’t an issue, we have worked very hard to set our business apart from the rest. Our team are employed with us and this enables us to closely manage and develop their practical skills with us over the course of their apprenticeship and retain them into tradespeople and leadership roles – we now employ over 40 team members and continue to grow. By employing our team members, we manage our labour costs. This strategic approach we have applied to our business has allowed us to manage our costs and your build providing you with the security and confidence that we are here to stay.

Our business is always looking forward and planning for the future. We forecast 6 months, 12 months, and 18 months ahead to ensure we can stay one step ahead of any market issues and trends.

With the above in mind, we have a strong business model and capable management team in place to ensure that the best outcomes for our clients and the business are always achieved.




What you can do to prepare your home for a severe weather event?

Australia has recently experienced some severe weather conditions including high winds and heavy rainfall. These weather events and other similar events that have occurred in recent years, can at times be so severe that they exceed the Building Code of Australia (BCA) design benchmarks for homes constructed within Australia.

In such extreme weather conditions rainwater can be forced through closed windows and sprayed up rooves in a manner which homes aren’t designed for and therefore water may enter some homes. The resulting water ingress may cause damage to your home, often this damage may only be of a minor nature, but can still cause considerable stress to you as the homeowner.

What can you do to prepare your home for a severe weather event?

As part of your ongoing home maintenance we recommend the following check measures are undertaken to avoid any water ingress to your home;

  • Check all gutters and downpipes are clear of debris, leaves etc…
  • Regularly check your roof for signs of slipped roof tiles, cracks and possible water ingress entry points – especially if you have recently had a contractor attend your property eg. Foxtel or solar panel installer
  • Check your stormwater drains for blockages
  • Check your window and door seals aren’t displaying signs of cracks and ageing
  • Check for other possible entry points and seal if required

If during a severe weather event you do get water ingress – who do you call?

  • If it is an emergency please call the SES for immediate assistance
  • In most other cases, do what you can to stop/reduce the incoming water and then contact your home insurer as the first step to understanding what you can do

When these severe weather events happen most owners contact the builder of the home to request an inspection or even rectification of the damaged parts however if this issue hasn’t occurred until now then it is likely it is due to the severe weather event and these items will be claimable under your owner’s home insurance or alternatively are maintenance issues as the homeowner for you to attend to.

Should I Stay or Should I Go? Hot tips to help you survive your renovation

Tips for homeowners living through a renovation, extension or addition

Whether you stay or move, your large scale renovation, ground floor extension, or first floor addition can cause stress. Of course, stress is simply par for the course when building, and nearly everyone — regardless of whether they moved out or stayed put – experience some sort of challenge during the build. We’ve put together some tips to help you survive your renovation – whether you stay or go for the duration of the build;

If you decide to stay and live through the renovation, your number one priority is to preserve your sanity:

Before the renovation:

  • Declutter. It will be easier for you to live with the essentials before you start the renovation.
  • Stay far away from the work area to ensure you’re not in the builders’ and tradespeople’s way.
  • Tackle the dust debacle by placing all essentials in one room that you will not renovate, cover them, then seal off the area.
  • Take all your fragile items and store them far from the work area. If you are going to store them in boxes, don’t forget to label them as fragile.
  • Prepare a lot of drop sheets, tarpaulins and blankets. You are going to need a lot of them to cover important furniture pieces and other items.
  • Label every sealed storage box, so you know where to find the items you need. It is a hassle to move things around every time.
  • Ensure you have made all of your decisions and finalised all of your selections BEFORE your build starts. This will take away the stress of feeling rushed to make decisions and ensure clarity when heading into the build. The last thing your builder wants is to work out variations during the build following a last-minute change of mind. Believe it or not, most builders’ would prefer not to have any variations during your build!

During the renovation:

  • Be prepared; it is an emotional journey. Give the builder and their team breathing room to complete the build, communicate with them on their expected finish date and let them work towards it.
  • There will be times when you will feel like everything is slow and one task is taking so much time. When this happens, try to relax – it could be simply due to the number of different trades required to be coordinated for 1 area, or the team is ahead of schedule or waiting on a delivery.
  • If you have been provided with a timeline, generally, your builder should be on track or thereabouts. As long as they are still confident of achieving your end date, it’s not so important how each specific item progresses in between. If you are concerned, discuss the issue with your builder during a scheduled meeting.
  • For large scale extensions and first floor additions
  • Try to avoid unnecessary chats — the type that goes on for hours.
  • If you have zero background in construction, do not be tempted to work alongside the builders and tradespeople. Let them deliver what is agreed in the quote. Also, you do not want to mess up, then pay extra to have it fixed.
  • For better indoor air quality, turn off your air conditioning system.
  • Always wear your shoes and slippers.
  • Keep the kids and your pets away from the construction site at all times. If you have dogs, consider keeping them away for the duration of the build, as doors and gates can be left open, and the builder is not responsible for keeping an eye on them for you.
  • Yes, the portaloo stinks. They are cleaned fortnightly, but it doesn’t take away the youthful nostalgia of festival toilets!
  • Water ingress – it happens. Your builder will do everything in their power to prevent it; however, water can still work its way in during the initial construction stages of a large scale project. Don’t stress though, as your builder will make good the areas that are impacted – just communicate with your builder when this happens.

Based on experience, it is possible to stay in your home and live through a large scale renovation, ground floor extension or first floor addition, but expect changes in your daily routine, and sometimes you may be without water, electricity or internet. You also need to be extra careful to avoid accidents on site.

If staying in is becoming too difficult for you, there is no shame in moving out. Here are our tips:

Tips for homeowners temporarily moving out

  • Make sure that you have the funds for it, discuss with your builder the recommended duration so you can look at accommodation.
  • Look for a decent rental property close to the construction site, school, and workplace, so travelling back and forth won’t be an issue.
  • Conduct regular drivebys to see your home take shape and, if needed, schedule a meeting every few weeks with your builder to discuss progress.
  • Never enter the construction site without notifying the builders for security and safety reasons.
  • If you’re going to live with a friend or a relative, try not to make them feel like you’re conquering their space. Shop for your own food and use your own toiletries.

Deciding to live through a large scale renovation, ground floor extension or first floor addition, or moving out is a personal decision. It is up to you and your family to weigh up the pros and cons, depending on your situation. Assess the amount of work to be done, and the time the builders need to finish construction. Once you know the scope of the project and the specifics of the construction and design, you’ll figure out where you will stay while the work is being done.




How to Decide Whether to Move Out or Live Through a First Floor Addition, Ground Floor Extension or Renovation?

Whether you are building a First Floor Addition, Ground Floor Extension or Renovation, the one question that our clients always ask us is can they stay in the home and live through construction or should they consider temporarily moving out? This is a big decision to make — with a lot of factors to consider other than your budget when entering into significant construction works to your home.

We have outlined below some of the factors to take into account when looking to stay or move.

Factor # 1 – Scope of works

How much work is going to be done to your home? Are you doing a large scale renovation, ground floor extension or first floor additionAre you renovating the kitchen and bathroom? These are two areas of your home that you often cannot live without for more than a few days. Is there going to be demolition? Are you renovating a completely isolated part of the house (e.g. second floor)? Can you live under the addition while being built?

These are the questions to consider when deciding whether to remain living in your home or move out and allow the builders to work their magic.

Keep in mind that construction is disruptive in nature. It can cause inconveniences and interrupt your daily routine. It is also possible that you will interfere with the builders and slow things down.

Therefore, if you are:

  • Conducting a large scale renovation (50% of the house)
  • Doing ground floor renovations including areas like the kitchen
  • Doing a demolition
  • Removing toxic materials (e.g. asbestos and mould growth)
  • Removing and replacing the roof
  • Doing a total kitchen and bathroom overhaul

You should consider moving out to make way for the builders who will work on your home.

Factor # 2 – Budget

Can you stretch your budget to be able to afford temporary accommodation?

Budget is often a major concern for many renovators or addition and extension builders. The truth is that both moving out and staying in will incur additional expenses.

If you are planning to move out, you must prepare for the costs of short-term renting.

To save money, you could stay in an Airbnb, or a cheaper hotel/motel, go on a budget vacation, or you could ask a friend or a relative if you can stay and live with them temporarily.

If you choose to stay amidst a large-scale renovation, ground floor extension or first floor addition be prepared to order takeaway and bottled drinking water. All these are going to add up to your expenses.

 

Factor # 3 – Basic cooking facilities and a working bathroom

If you choose to live through the large-scale renovation, ground floor extension or first floor addition, you might need to set up a makeshift kitchen and a temporary dishwashing area. Cooking using your outdoor kitchen or BBQ is a great idea.

In general, a makeshift kitchen almost works for most builds, but it is going to be a huge adjustment for everyone with them. You should be prepared to be without a full working kitchen for a least 6 weeks.

Living through a large scale renovation, ground floor extension or first floor addition is also easier when you already have two bathrooms in the house, and one remains functional while the other is being renovated. Otherwise, you need to buy a portable toilet. If you are renovating both as part of your build, be prepared to pay more if you request for them to be renovated separately instead of at the same time as the builder will incur additional travel, labour, time and site costs.

Access to water is crucial too. If you’re staying, ask your builder about the times that they need to turn off the water supply so you can create a bathroom schedule and store clean water for cooking and doing chores.

 

Factor # 4 – Level of tolerance and patience

Can you deal with the noise coming from jackhammers, electric saws, welding machines, dump trucks, cement mixers, cement cutters, tamping machines, sledgehammers, and drills as early as 7AM and as late as 6PM? 

How about that fine gyprock dust that gets everywhere despite sealing up some parts of the house?

Can you deal with all the waste from the construction and scaffolding around your house?

Would you feel comfortable doing your daily routine with the builders and tradies walking around the house? Do you think they can do more when you’re not around?

There are the clients who can and the clients who can’t handle living through a construction zone! Which one are you? Based on experience, a lot of people commencing a large scale renovation, ground floor extension or first floor addition decide to move out in the middle of construction because they cannot bear the noise, dirt, and lack of privacy. Not having to live through the mess and chaos is a lifesaver, especially during these stressful times. You may also find you will be more excited with your new space when you move back in rather than living through the chaos to get to the end.

 

Factor # 5 – Length of the renovation

When the large scale renovation, ground floor extension or first floor addition takes over your home for weeks or months, moving out is the ideal option. The builders work faster with you out of the way, which results in quicker turnaround times and more money saved on labour costs.

 

Factor # 6 – Who are you living with?

 

Most couples with no children decide to live through the renovation process, but only when smaller-scale work needs to be done.

But, if you are doing major building works and you have small children, teenagers, pets, and are living with elderly members of your family, consider moving out. It would help if you got out of the way so the builders would be able to get more done quickly.

 

Factor # 7 – Which is more stressful? Moving out or staying in?

Whether you stay or move, your large scale renovation, ground floor extension or first floor addition can cause stress. Of course, stress is simply par for the course when building, and nearly everyone — regardless of whether they moved out or stayed put – experience some sort of challenge during the build.

Deciding to live through a large scale renovation, ground floor extension or first floor addition or to move out is a personal decision. It is up to you and your family to weigh up the pros and cons, depending on your situation. Assess the amount of work to be done and the time the builders need to finish construction. Once you know the scope of the project and the specifics of the construction and design, you’ll figure out where you will stay while the work is being done.

The most important thing is communication – confirm your selections and questions before your build commences and then allow your builder and their team breathing room to get stuck in and complete the project at hand.





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How to save money building a First Floor Addition vs a Ground Floor Extension

We often have clients that approach us looking to add more room to their home.

A common question we are asked is ‘Should I build an extension or an addition?

We look at the benefits of building an Addition vs an Extension below.

What’s the difference between an Extension and an Addition?

Extension

In the building industry, the term ‘extension’ refers to extending an existing building; to extend its overall floor size. Basically, it means to add another room or make a room larger whilst remaining at the ground level. To add an extension to your home, you will need to sacrifice some of your backyard or front yard to accommodate the extra room.

Addition

Similar to an extension, an addition can add more living space to your home. However, with an addition (also known as a second storey addition/first floor addition), you do not need to give up any of your yard space as an ‘addition’ goes up and not out like an extension is required to do. In other words, when you have an addition done to your home, you will gain another floor level. Adding height rather than length.

The cost benefits of building an Addition vs an Extension

  • You can keep living in your home whilst an addition is being built, this saves you the costs related to finding short term accommodation and relocating your family and your possessions.
  • You do not have to worry about soil removal. When building an extension, excavation and site preparation costs can be high. Not only do you have to prepare the site to be built on, you often need to remove any excess soil and other materials to make way for the extension.
  • An addition can add significant value to your home. How much value can vary greatly depending on what you plan to add to your home. Regardless, a first floor addition is said to add between 30 to 60% to the value of your home.
  • If you add extra bedrooms and bathrooms to your home, you can expect a significant return on your investment. This increase in house value is often in line with the difference in house prices from going from a three-bedroom home to a five-bedroom home.
  • Choosing to build a First Floor Addition to your home rather than a Ground Floor Extension will also result in you being able to retain more yard space and this will also further add to the selling power of your property.

Regardless of your decision, our team can assist you with an Addition or Extension to your home. Contact us to discuss how we can add more room to your home.

What type of loans can you use to fund your addition or extension?

If you are building an addition or extension on your home you may find yourself needing to arrange finance to pay for the build. We can help you secure the appropriate finance for your build.

Refinance your current mortgage

To pay for your addition or extension you can opt to refinance your existing mortgage. This means that you will use the equity in your home to obtain a loan for a higher amount than what you currently owe to finance your addition or extension project.

The new loan will replace your old loan and you can choose to stay with your existing finance provider or move to a new finance provider. Refinancing has several advantages for homeowners with substantial equity in their homes.

First, it may allow you to obtain lower interest rates without changing your monthly mortgage payment or adding on a new payment.

Second, some lenders “may approve a loan based on the estimated value of your home once the addition is completed,” which is convenient for projects that require a large amount of money, such as a second story addition or ground floor extension.

Take out a Construction Loan

A construction home loan is a type of home loan designed for people who are building a new home, a first floor addition, ground floor extension or doing large scale renovations. It has a different loan structure to home loans designed for people buying an established or existing home.

A construction loan most commonly has a progressive drawdown. That is, you receive instalments of the loan amount at various stages of construction, rather than receiving it all at once at the start. You generally only pay interest on the amount that is drawn down, as opposed to on the whole loan amount.

A number of lenders offer construction loans that are interest-only during the construction period and then revert to a standard principal and interest loan.

Of course, a construction loan is just one potential source of funding for your project. The Federal Government recently unveiled its HomeBuilder scheme, which will give eligible homebuyers and existing owners grants of $25,000 to help them construct or substantially renovate their home. Strict eligibility criteria apply– for example, you’ll need to meet an income test, and be building a new home that’s worth less than $750,000 or a renovation that will cost at least $150,000. For more information visit our blog post here.

We can connect you with our finance specialist to discuss how to get started today.

 

That’s a wrap for 2019

 

Our team has officially wrapped up things for 2019! Here is an overview of our year!

Our office is now closed until 14th January 2020.

We wish everyone a safe and Merry Christmas and a Happy New Year!

You can still contact us on our website during the break and we will be in touch when we return. For any enquiries please fill out the form below.

Building Up: The Advantages of Adding a Second Floor to Your Home


At 32 Degrees Building, we specialise in ground floor extensions, first floor additions, and custom built homes. Often, whenever someone is planning to make more room in their home, a common question that we get asked is why is it better to build upwards with a second storey instead of outwards with a ground floor extension? What makes a second storey addition a great idea? So we decided to list just some of the benefits of adding second storey to your home:

Gain more living space without moving out

This is perhaps the greatest advantage of building a second storey (as well as the best reason to do so), especially if you live in a location that you really love, somewhere that truly suits your lifestyle. By renovating your home and adding a second storey, you can acquire more living space without having to give up the perks and convenience of living in an area that has all the amenities, services, businesses, and opportunities that you need, want and enjoy.

With greater room, you and your growing family can live more comfortably. On top of that, additional space means that you can stay in the family home for the years to come, as there is enough space available for a multi-generational household.

Keep your outdoor space

Why sacrifice your yard to extend the size of your home, when you can build on top of the ground floor and retain your outdoor space? Adding a second storey is the smart way to go, especially if you need additional space in a house that is built on a small block. This allows you to have the space outdoors as an alfresco living area with a pool, a lovely garden, or an amazing playground for your children and pets.

Get beautiful views

If you live in a picturesque location, a second storey is a great way to take advantage of the amazing views that your area has to offer. For example, if you live near the ocean, you can simply open and look out of a window in your second storey to take in the breathtaking waters without having to leave your house. Or, why not build a balcony where you can relax and have a drink while looking at the pretty sights before you?

Make necessary changes and repairs to the ground floor

On the practical side, if your home needs both repairs and additional space, a second storey lets you hit two birds with one stone. Building a second floor means that your ground floor has to meet the requirements that can provide structural support to the second storey. While the changes are being made, you can grab this opportunity to make some suitable home design decisions and improve your home’s overall interior look and style. You can also use this chance to replace faulty or damaged parts of the house, such as windows and doors and consider upgrading or adding ducted air conditioning.

Add value to your home

Last, but not the least, building a quality second storey can raise the market value of your home, should the need to sell arise. This is great especially if your house is located where there is a high demand for residential properties with close proximity and easy access to good education, career opportunities, medical centres, transportation, and other necessary amenities and services.

Do you want to increase your living space with a second storey addition? We at 32 Degrees Building provide our building services across South West & Western Sydney, the Illawarra, the Southern Highlands, the Eastern Suburbs, and Sutherland Shire. We aim to help our clients achieve their dream family home, with a spacious living area that can meet the needs and demands of their lifestyles. To learn more, contact us.

 



Article written by: ibuildnew.com.au