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October 15, 2008 | | Comments 0

Owner Builder True Cost Savings

One of the most common questions we are asked by prospective Owner Builders is “How much am I going to save by Owner Building?”

That’s not a question that can be answered right on the spot – and it’s also not the only question they should be asking! You see, the key points influencing the decision to become an Owner Builder have to be more than just price!

However, let’s just focus on costings for the moment.

If you want the cheapest house then there is a very simple answer: Go to the nearest display home centre where all the project builders have their houses lined up with their price lists, and select the home that comes as close as possible to meeting your needs. Make no changes to the standard plan or specifications. Build it to the minimum stage and finish it yourself (ie. carpets, tiles, landscaping, driveway, etc.).

That is the cheapest way to build a house. No question about it. Even the best Owner Builder will struggle to match the pricing structure of the project home builders when compared on a square metre basis.

Here’s proof in a case study:

Ok, it’s mid October 2008. Let’s choose a builder from the top 10 volume builders in Queensland: Coral Homes. As the average size of a single storey house today is 250m2 let’s select something around that size from one of the designs from their website: The Brampton 251. It is 251 square metres, has 4 Bedrooms, a Double Garage, etc. The base price is $139,900. As we know the industry very, very well we can tell you that to finish the house, including initial site costs, retaining walls, internal floor coverings and landscaping, etc. you should add an additional 30% to the base price. This will give you a finished price of $181,870 for a modest, single storey home in South East Queensland. (Prices differ obviously on a regional basis, but let’s use this as a good base for the equation.)

This is equivalent to a finished house price of $724.58 per square metre.

Unless you are a qualified carpenter and you are going to do the majority of your own work you will not match this price as an Owner Builder. In particular when looking to build a contemporary home of quality materials, using professional tradesmen. 

So if you are doing price comparisons as an Owner Builder then forget comparing your prices to the Project Home Builders. Of course, if a project home is all you want, then go ahead and get a project home built.

But if you do not want a project home then you need to plan to spend from $900 per square metre up to $1200 per square metre as an Owner Builder. Then you need to compare that to the cost of a custom builder who is likely to charge you from $1100 per square metre to as much as $1500+ per square metre.

Why does the price differ so much? Well that’s a whole new article! (and something we can discuss later on Owner Builder Advice). Some hints about this topic pop up around this website and on our E-Course so keep reading and researching if you wish to learn more. 

In summary, you should be very clear about what it is you want to achieve and why. Then go and price your detailed plans with professional, custom builders. If you want to save money by becoming an Owner Builder you must first start with a realistic budget expectation of the cost of building your house, on your land, with your design and your specifications. We can then help you to work out the ‘true cost’ savings of Owner Building.

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