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.
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.
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.
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Building smart energy efficient and sustainable additions
The demand for green housing is getting bigger by the minute. The HIA GreenSmart program offers up-to-date information on practical, affordable and durable environmental solutions for residential design and construction.
Today there is more demand for builders to create sustainable homes using environmentally responsible housing design ideas, building techniques and products.
A GreenSmart house will:
✔ Improve the water and energy efficiency of the home and reduce energy bills and costs
✔ Create healthier homes for occupants
✔ Provide options to make the home more adaptable for all stages of life
✔ Reduce waste from the building process
✔ Improve site management during construction
Our Builder Alistair has completed the GreenSmart Professional training and is Accredited as a GreenSmart Professional.
Some things that we have been integrating into our first floor additions, ground floor extensions and renovations are:
✔ Improved thermal performance
✔ Passive solar design and natural ventilation
✔ Design and operational issues for water and energy efficiency
✔ Selection of water and energy-efficient appliances
✔ Lighting
✔ Sustainable building products
✔ Design
When planning your build consider asking your builder or planning team these questions:
Have you thought about the orientation of your addition?
What windows and type of glass to use in your build?
What energy efficiency and sustainable products can you use?
When you meet with our builder and work with our drafting team for your project, we will take these important things into consideration for the design and build of your addition or extension.
Contact us today to discuss how we can integrate environmentally sustainable building solutions into your build.
What comes first? Plans or Quote?
We often get asked: “What should I do first? Should I get a quote for my home extension/addition or should I get plans drawn up?”
These are our top 5 tips on why you should get a quote from a builder BEFORE getting plans for your project when building an addition or extension.
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- Obtaining a detailed written quote or proposal for your addition or extension comes with many benefits. In your quote the builder should provide you with an indication of the size of the build (how much room is going to be added to your home), the number of rooms being added and what materials and inclusions are being used so you know what is included and if you can afford what you are planning to build.
- A builder can arrange to assist you in drafting plans inhouse or have relationships with draftspeople or architects that specialise in the type of build you are after. This can make the whole process smoother and faster saving you time and money.
- When you work with your builder they can review your plans with you and the draftsperson to ensure you are staying on track with costs and may pick up on items that may be of concern from a construction viewpoint. This input is important in ensuring that you achieve what you set out for in your build while staying within your budget and avoiding issues that could arise during the build if not picked up during this critical planning stage.
- A builder can help and advise you on the true costs for different material options before you commit to plans and approvals. This can in turn ensure that you get the right materials, resulting in the right look for your build at the right cost.
- A builder can consult and guide you with on how to achieve what you want while managing what you can afford. This is best done prior to plans being drawn up due to the builders expertise in the type of build you are looking at. This can reduce the amount of plan revisions and save you time and money in the short term and long term.
If you are thinking of planning or building an addition or extension contact us on (02) 4647 2324 or fill out the form below to get things started.
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.
How we are keeping you COVID safe during your build
With the current challenges associated with COVID-19 and our clients’ safety and well being at the top of our priorities, we have implemented several measures to ensure that we keep you COVID Safe during your build.
We are a NSW Government registered COVID Safe business with a COVID-19 Safety Plan in place and we are committed to keeping you and your family as well as our team safe.
Some of the measures we have implemented are:
- We keep our team isolated from the existing home and our clients for the maximum time period that is practicable. This includes not penetrating the ground floor for as long as possible when building a first-floor addition and utilising scaffolding to complete the majority of the build until we are required to create the entry hole for the stairs.
- We have introduced hygiene stations (pictured below) across our sites, which ensures that there are adequate facilities for our team to enable good hygiene practices (e.g. soap, hand sanitiser, signage and reminders).
- We have developed and implemented infection control policies and procedures.
- All of our team have been directed to comply with the latest quarantine measures if they are experiencing any flu-like symptoms or are feeling unwell.
- Every individual that enters any job site is required to complete an induction and we keep log of their details.
- Rather than face to face communication, we can communicate with our clients via video calling/conferencing, messaging (Whatsapp, text messages etc.) and email before, during and after the build, to enable a seamless contact-free build process, eliminating any unnecessary contact.
Your family’s and our family’s safety is of the utmost importance and we have implemented the above strategies to ensure that we all remain safe and healthy during these challenging times.
We appreciate your continuous support and business during these times and would love to create more space for your family to live comfortably and happily together.
Should you wish to discuss your build or enquire about the safety measures we have in place, please contact us on (02) 4647 2324.
This Is Why People Love Custom First Floor Additions
First floor additions, also known as second storey extensions are increasingly popular for those homeowners who don’t want to lose valuable garden space but want to increase their family living space. Best of all, going up is easy and our team will do their best to ensure the process is smooth and the build is completed on time and with minimal disruption to your daily lives.
You can have a modern, liveable home with plenty of space for your family – without giving up the location you love.
Our team are the experts in planning and building custom/tailor-designed First Floor Additions
We are often approached by clients who would like to create an open plan living environment downstairs, whilst adding more room for the family to live comfortably upstairs. The best way to achieve this is with a Custom First Floor Addition.
As specialists in these types of builds, we have many years of experience enabling us to easily offer solutions and suggestions on products, layout and how to get the most from your investment. We are able to share with you relevant quality projects that have resulted in many of our clients becoming raving fans.
No Plans? No Worries!
If a client comes to us without plans, part of our service is to organise for a building designer to assist with the plans and design process. This is will be included in our Preliminary Agreement if required.
We can arrange for our draftspeople to consult with our clients at their home and discuss their project requirements. From there we will then provide plans based upon their specifications and work hand in hand with our clients and the draftsperson to ensure the plans continue to work within the tailored build cost estimate that we have provided.
Improve your lifestyle and bring your family together
When building their addition our clients often decide to open up downstairs living spaces, renovate their kitchen and bathrooms and create new living spaces internally and externally. Once the addition and renovation are completed they are left with a finished product that is like moving into a brand new home.
We are able to create open plan living spaces and improve their current living situation. Our mission is to bring families closer together.
Take away the stress, let us help you plan, manage and design your build
We have a streamlined process which is stress-free and fun. When you are building with 32 Degrees Building you don’t have to worry about anything other than choosing what you want to add to your home and we will work with you on the design to suit your home and your lifestyle.
Contact us to start your building journey today
Not ready to book? Check out our process and how we do things here.
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.