How much does a car cost per seat? Alternatively, what is a dollar per kg of that car? Can you imagine walking into a car dealership and asking that question? So why do we still ask builders what does a house cost per m2?
Read on to get an understanding of what m2 pricing means, why it’s quite misleading and three steps you can take to ensure you get accurate pricing from builders.
Why do we still talk about m2 pricing?
Firstly, let’s recognise that when you are asking what the m2 price of a home is, you most likely want to know how much house you can get for your budget? For example, will my $300,000 get me a 300m2 home?
Unfortunately, unless the inclusions or exclusions have been explained to you by the builder the price is useless – at worst, quite misleading!
Why m2 prices are misleading
Most of the construction industry quote home m2 prices that start at an arbitrary figure (whatever it might be). Therein lies the Achilles heel, it is a “start”. It automatically assumes that you as a client will fit in with the builder’s “ideal client” scenario and that what they have allowed as “standard inclusions” will fit in with your requirements. Put another way – the builder assumes he knows what you want.
This assumption, of course, is very misleading in terms of what you should be expecting from a builder. Very rarely does any single investment decision get much more significant than buying your home, and when you are looking at investing hundreds of thousands of hard-earned dollars in a home, the decision must be the right one for YOU – not somebody else.
To summarise, a m2 price is just an arbitrary figure that a builder has picked, preferably as low as possible, to ensure that you, as a customer, will hopefully be interested in building a home.
How much does a car cost per seat? Alternatively, what is a dollar per kg of that car? Can you imagine walking into a car dealership and asking that question?
How do I get an accurate idea of price?
It is of utmost importance that your ideas and requirements are given due consideration before anything close to a price estimate is provided to you. If a builder doesn’t give you the forum to explore your ideas, and what you want in a home, then you are likely to end up with a home that you don’t want.
Of course, your budget is a crucial factor in any investment decision, but it must be the right decision for YOU. A builder should be able to give you a “window of potential investment” based on a plan idea or specific features, but it is the attention to the detail that will impact on the final figure. Those details can make the difference of many tens of thousands of dollars sometimes.
A builder should be able to give you a “window of potential investment” based on a plan idea or specific features, but it is the attention to the detail that will impact on the final figure.
When is an m2 price for a home right?
The only time that an m2 amount would be appropriate is after the completion of the site investigation, preliminary work and the Fixed Price Contract. The Fixed Price Contract must be relevant to ALL considerations – not just a “Standard package” plus “extras”. For example, consider the following:
“Standard” 3-4-bedroom home may get quoted at $1000 m2 to use a round number
- What about likely soil test results and the impact they may have on engineering design, footing design and building structure?
- What about potential ecological and geological considerations?
- What about potential environmental considerations?
- What about the provision of services on site and connections?
- What about site location? Is it regional or remote?
- What about your preference for Kitchen design and layout?
- What about your preference for floor coverings or finishes?
- What about your preference for bathroom and ensuite layout and design?
- What about Electrical? How many GPO’s are you getting?
- What about A/C or Fireplace?
- What about Insulation?
As is evident, any or all these considerations can have a marked impact on what your final investment will potentially end up being. The original “m2 rate” will bear little resemblance to the final price.
3 Easy Steps to ensure you get a reasonably accurate idea of what your house is going to cost! (without asking for an m2 price!)
We understand that our clients need to know a pretty good idea of what their home is going to cost, as early as possible. So, to make it as easy as possible, we’ve compiled a list of 3 steps or questions you should ask your builder to ensure you get a clear understanding of what your home is going to cost.
Step 1: Ensure your builder knows what you require, where your site is, and any other items you think are essential.
Step 2: Make sure you understand the inclusions and exclusion in the pricing the builder is giving you and how that differs from your requirements.
Step 3: Ask the builder how much OTHER clients have ended up spending on similarly sized homes.