HomeSource’s views on rising cost of building materials
With fuel prices constantly growing, interest rates increasing and food prices on the rise, is it any wonder that building materials are any different?
Whether people like it or not they too are experiencing increases and it is starting to cause problems for unsuspecting builders and home builders / renovators alike.
HomeSource Managing Director, Pia Vogel, is urging Australians to take particular care when managing their building contracts.
“The high costs at the pump coupled with the demand for raw materials have had a major impact on the cost of essential building materials,” Pia Vogel said.
It is expected that due to high fuel costs, the increasing cost of delivery will add about 5% to the price of principal materials such as bricks and concrete in the near future.
“Even if fuel prices come down a little, high costs are inevitable these days and unfortunately they have become an issue for both builders and homeowners alike.
“Many problems stem from project cost estimations being inaccurate or unrealistic from the start. Steel is a prime example; the cost is rising so rapidly that in many cases, finalised pricing can only be secured two weeks in advance of delivery.
“As a consequence it is becoming very difficult for builders to give their potential customers accurate quotes. While price rises are inevitable, it is more important than ever to be careful in the way these are handled as the consequences can be severe,” Pia Vogel said.
“If a homeowner accepts an unrealistic quote and signs a contract that does not allow the builder to claim back any price rises, it is unlikely the project will ever be completed.
“The builder may be unable to finish the project or he may go bust in the process, leaving the consumer to pick up the pieces.”
“On the other hand, if a builder attempts to forecast price rises and suggest contingencies to cover them, it could deter homeowners from signing the contract as the prices may look too high in comparison to others. The instinct of consumers is to go for the lowest price but often they are oblivious to the hidden costs.”
Pia Vogel said this stress and disappointment is avoided through a combination of open communication and thorough investigation.
“It is paramount that homeowners and their builders have realistic expectations, recognise the potential for cost changes and establish a rational plan to manage variations professionally so that they are well documented.”
“The way both parties approach a building or project contract will determine whether they sink or swim in these uncertain times,” Pia Vogel said.
“At HomeSource we provide members with access to both legal and building professionals. It is clear that both sides should not avoid the inevitable - shop around, get the facts and be sensible enough to establish a contingency fund and contract plan to cover price rises and avoid unwanted stress and disappointment.”
“And with all the fuss about pricing, don’t forget to check the builders you are using are fully licenced and qualified. At HomeSource we can help you with this too.”
28-Jul-2008