Brisbane has been a strength of ours for over 9 years. This close involvement in residential and commercial construction has provided us with in-depth knowledge of the market. We have the best network of townhouse builders Brisbane can offer. Also we know the apartment builders with cost advantages and in-house trade companies. They come highly recommended by other developers and consultants impressed with their previous performance.
Construction costs in Brisbane have increased significantly in 2015-2017. This is because of the large number of projects that were taking place which resulted in upward pressure on trade costs and materials. They have now peaked in their cycle which was first indicated by banks making remarks that there was an over supply of apartments in the Brisbane CBD market. The result of which is that it is now hard to get finance from the major banks. I often advise developers to talk with alternative fund sources such as DFP or GPS Investment Fund because they are more flexible with their offerings. They also provide a closer relationship with their borrowers which allows for more understanding if times get tough.
The construction costs in Brisbane and South East Queensland have been going up significantly over the last three years. This is a result of the peak of activity in the market allowing trades to increase their prices because of high demand. Also it is due to the continued periodical increase in materials such as concrete.
As the market contracts because of fewer projects achieving finance the prices will stabilize. That is happening now. Prices for townhouses range from $200,000 to $300,000 per unit depending on the design. I would note that we have seen some basic designs and single level units built for $170,000 in outer suburbs.
The design must be efficient and without basements to achieve the $200,000 per unit. Often townhouse designs with counter levering, heavy sound insulation or a steep block bring their costs up to the higher end. It is important when working with these blocks to engage a builder early and identify the expected construction cost so they can help you reach your target.
Apartments are still being built for $220,000 to $300,000 per unit. Where possible keeping the parking on grade results in lower construction costs. We have builders with in house trades like block layers and form workers which help lower their costs with apartments. We also know the builders in Brisbane who are coming off a project and hungry for another job.
Taking a design and construct or ECI contract with a builder can ensure there are no surprises with prices. Many times I have seen townhouse projects not meet their budgets as the developer expects a much lower price than they get in a tender. This happens because of the quick price changes that occurred when the client would be working on older estimates. Or when design elements affect the costs but are not considered in the budget.
When engaged at an earlier stage a builder will highlight these costs before they become a problem. A builder will also suggest engineering efficiency that will bring your townhouse or apartment building to a lower cost.
There a number of high profile builders becoming insolvent in South East Queensland market. This is due to the failure of some developers to pay and the reduction of work in the area. It is evermore important to ensure the builder you contract is not in a risky position or struggling to keep up with their payments.
Should they be too exposed to a particular developer or not paying their trades on time I would not suggest taking a risk with them. We keep a close eye on our builders financial performance. So all those we suggest to you will be able to complete your project.