The one question group home builders hate you to ask, but the question they get asked almost on a daily basis is, ‘What’s your square metre (sqm) rate?’ In most cases, this is very difficult to answer. Most of us have been told that this is the way to compare new home costs as it typically takes into consideration the materials and labour for the entire home. But when you delve deeper into all the elements that factor into pricing a new build, you might start to see why builders hate this question so much and why the answer may not help you at all.
It’s a bit like asking how much a car costs per sqm and then comparing a Lamborghini with a Toyota. Both offer very different looks, methods of construction, and inclusions and, of course, very different costs and products. Perhaps Toyota could make a Lamborghini if they charged the same sqm rate (royalties and copyright aside).
Firstly, the size of the home changes the sqm rate (smaller homes have higher rates) due to different sized homes containing similar high cost items such as kitchens, bathrooms, windows and doors. But the problem mainly comes when you try and compare the sqm rates of homes of the same size. New home builders include and exclude different items, depending on their processes and how they want to market their wares.
What you expect to be included in the rate changes everything. Some of the bigger cost items such as cladding, joinery and electrical can be easily manipulated to provide different sqm rates. Consider the number of windows and their size and type (ie bifolds are more expensive than sliding doors); number of exterior doors and their size, are they stacker doors or basic ranch sliders? It’s very easy for the same plan to have seven less units with variations in the types of doors and, therefore, change the cost and sqm rates considerably – by up to $10k.
What cladding is in the sqm rate, timber weatherboard, brick, board and batten, shadowclad? All change the sqm rate significantly. How many power points and lights are included? Again, builders can change this to be the bare minimum or many more. What insulation rating (or R value) is included? Is the garage insulated? These items are all open to manipulation – some builders put in the basic, some have it higher. What fittings and fixtures does that include? How many bathrooms and en suites are you comparing? An extra toilet and vanity can easily add significant cost onto the rate considering the unit itself, the plumber, drainlayer, electrician, mirrors, tapware, and so on. I’m going to stop there, without even touching on where you are building (its wind zoning, soil type, and contour)!
If you are going to try and compare sqm rates, you need to consider three categories: Council • Specific land requirements • The materials/build of your home.
You will also need to devote considerable time to comparing them, and from experience, this can be a long and frustrating exercise. Realistically, a builder can build to any sqm rate (of course some choose not to and target a particular market), but what you have in the home, and the other factors above, will create variables.
So how do you compare costs if you don’t use a sqm rate? You will need to find new home builders who are open and flexible with inclusions and their pricing. Many group housing companies are restricted by their supplier agreements, and their most cost-effective pricing methods may be using materials that they have a bulk buying rate on, but you don’t particularly like. So shop around. Work through a floor plan, on your specific piece of land, with clearly labelled inclusions and exclusions, and this will help ensure you get value for money.