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Hike in construction costs - is the boom back?

  • 18-09-2016 9:13am
    #1
    Registered Users Posts: 54 ✭✭✭ Scorlóg


    Hey folks. I'm currently in tender phase for a sizeable extension/renovation job on my house and I'm a bit taken aback by the sort of quotes we're getting in. So far, most are coming back way over the budget we had set for the architect. The indication is that construction costs have started to soar up again in the last 12-18 months. Here's an example...

    When we started thinking about the project back in May 2015, we had a builder come out to assess the property and discuss what we could or couldn't do on our budget. We had a good discussion about the job after which he gave us a detailed estimate for the finished price for the entire project. This was based on some drawings and 3D mock-ups that I had prepared, along with a good description and examples of what we wanted, but no architects plans. So he recommended we engage an architect before proceeding.

    Roll on 18 months and we have plans all drawn up which are pretty much identical to what we had discussed with the builder. So I got him back to price it again off the plans and he came back with a price 50% higher than his previous quote for essentially the same job. I queried why there was such a disparity and he said that when he first quoted, we were at the tail end of the recession (May 2015?!) and that 'foreign labourers' have left the country now and so subcontractor rates have gone way up. He essentially said there's more work than supply at the moment so they can pick and choose and start to charge what they want.

    To be fair to him - we had an independent QS give us a costing report and his estimate was closer to the builder than budget we gave the architect. It's a worrying sign that things are headed back towards boom-time mentality and rates.

    So, has anyone had any experience with hiring a builder from the north? I wonder how N.I. rates compare to Dublin (and surrounds)?


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Comments

  • Registered Users Posts: 1,332 ✭✭✭ Rackstar


    How big is the extension and how much is the quote?


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    Rackstar wrote: »
    How big is the extension and how much is the quote?

    The budget we set the architect was €100k inc all costs - VAT, kitchen, glazing, plumbing etc etc. for a kitchen extension/rennovation < 40sqft, and a attic conversion. It's ambitious but achievable (according to the architect).

    The builder estimated 113 + VAT excluding kitchen, glazing, flooring, decorating. That's more like €150 or more when you include the extras.

    Regardless of the size or budget though - the fact is the same job was quoted 50% more 18 months later.


  • Registered Users Posts: 1,528 ✭✭✭ Dudda


    Architects aren't qualified to price jobs and use formulas and experience to guess how much something will cost. They're always optimistic which I think it's a good way to be as often the client will stretch a bit of they like the design. On the TV program Room to Improve the QS is always telling Dermot to make things smaller. To meet the budget.
    Having said that prices are going up a bit too but not 50%.


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    I take your point about the architect's ability to price but at the same time, we based our budget and guidelines for the architect off the quote we had been given from the builder so we were starting from a place where we already had a detailed estimate for what we wanted done. By and large, the architect just translated the description of what we had quoted into drawings - nothing major was added that would drastically increase the cost or spec.

    I would have expected prices to have gone up with inflation during that time and a few percent for recovery in the market but not 50%. I wonder how much of a degree of Dublin pricing there is going on when people come to view the job? We've engaged a few builders from Wexford and Kildare but I'm curious about rates from builders over the border too and the logistics involved in that.


  • Registered Users Posts: 30,636 ✭✭✭✭ listermint


    113... 100.... That's not 50%


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  • Registered Users Posts: 291 ✭✭ cork2


    An architect gives you an opinion on what they think it will cost given their experience. They wont try to mislead you but every job is different! Your own independent quantity surveyor budget costings are going to be as reliable as it gets and yes the cost of building is rising at last! The last few years rates from the perspective of those working in construction were absolutely horrific!
    Also don't go for a cheap quote. If you have a budget, cut things out of the job and keep the standard of work high as a posed to getting what ou want at a lower standard.
    Also extension/renovation jobs are highly unpredictable, make sure you have a good engineer onboard and a decent amount of money allocated for structural defects in the existing house which may come to light once the gutting takes place and you can see what you have. There may be no need for this but I've seen steel beams, columns, lintels missing above the ceiling and roof level. I've seen joists notched to breaking point and roof trusses without a stick of bracing. It's easier to put these funds back into the budget if unused rather than a problem mid project sucking the budget for finishes dry.


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    listermint wrote: »
    113... 100.... That's not 50%

    As the post said, 113 is ex vat. The full price of the build would closer to 150 (min, based on the build cost) which is 50% extra. The builder didn't include VAT or additional costs when he quoted this time.


  • Registered Users Posts: 1,189 ✭✭✭ hawkwind23


    Just be careful OP.
    I work as a tradesman and there seem to be a lot of builders out there attached to architects, they have the fancy website and graphic designed livery on the new vans but the quality of the work is shocking.
    These tend to be high end projects.
    My advice would be to focus on quality control , maybe an independent clerk of works.
    Price is the least of your worries if you end up with a build full of problems.


  • Moderators, Home & Garden Moderators Posts: 10,092 Mod ✭✭✭✭ BryanF


    hawkwind23 wrote: »
    there seem to be a lot of builders out there attached to architects, they have the fancy website and graphic designed livery on the new vans but the quality of the work is shocking.
    These tend to be high end projects.
    s.
    :)


  • Moderators, Home & Garden Moderators Posts: 10,092 Mod ✭✭✭✭ BryanF


    To sum up, so far,

    Poster got a builder 'estimate' and listened architect at design stage, which formed intiail impression of what the project would cost.

    Then 1.5 years later ..

    A Qs priced and builder 'quoted'' on actual drawings prepared for tender

    And the price was higher than expected..


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  • Registered Users Posts: 1,189 ✭✭✭ hawkwind23


    To the moderator who posted an ignorant reply then deleted it.

    My post is simply advice, they aren't happy with price and starting to look "up north" and the likes to get a cheaper job.
    I was merely highlighting that it's foolish.
    Plenty of conmen out there with professional looking websites and the like. Better to have a quality over price.

    Dunno why this was deemed a stupid post.

    I'll unsubscribe and leave it to the snipers.


  • Moderators, Home & Garden Moderators Posts: 10,092 Mod ✭✭✭✭ BryanF


    hawkwind23 wrote: »
    there seem to be a lot of builders out there attached to architects, they have the fancy website and graphic designed livery on the new vans but the quality of the work is shocking.
    These tend to be high end projects..
    Scaremongering, sweeping, and mixed up statement, that is disingenuous to architects & builders alike and illrevelant in the context of the OP's question.
    hawkwind23 wrote: »

    Dunno why this was deemed a stupid post.

    Where in the op, Does it suggest the builder is somehow 'attached' to the architect?

    What have 'New vans & fancy websites', got to with 'quality' ? And This 'shocking quality' occurs on 'high end projects'?


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    Ok folks, this isn't meant to be a witch hunt or me having a go at local builders.

    To clarify - we were given a detailed tender summary from the builder in question in May 2015, not just a finger in the air estimate. I'm simply trying to assess two things:

    1. Have construction and related costs really escalated by 50% in 15 months?
    2. If so, is there currently a costs advantage to using a N.I. builder?

    We have a budget and we have to work to it. I'll happily hire an Irish builder who can bring the project in on budget. Any suggestions or recommendations? Feel free to PM.

    Thanks.


  • Registered Users Posts: 1,189 ✭✭✭ hawkwind23


    Dunno what your problem is?
    Its a sweeping general statement that looking for cheap can lead to problems?
    Its made harder by misleading websites and advertising when searching further afield for a contractor on a small project.
    Just giving my opinion and advice.
    I'm outta here , some mod you are chasing contributors away.
    Good luck to you


  • Registered Users Posts: 7,179 ✭✭✭ the_pen_turner


    I have to agree with hawk. There is a lot of back handing crap going on. I see it every day. The are builders who only use certain tradesmen because they will as a few pound to the quote to grease the wheels of the builder . . It goes on a lot. I know tradesmen that were asked when looking at jobs to add a 1000 Euro to Bill so that they would get the job.
    I hadn't been asked my self . Not everyone is at it but it isn't uncommon


  • Registered Users Posts: 7,179 ✭✭✭ the_pen_turner


    Op
    The reason the quote is a lot higher is that there is a huge increase in running costs for a builder.
    Insurance and health and safety certification is gone out of control. Materials costs are higher. Labour is a lot higher than a few years ago. Tradesmen during the recession were working just to put food on the table. Now we have to get back to normal. Vans and tools need to be upgraded now becAuse it couldn't be done through the recession


  • Registered Users Posts: 23,179 ✭✭✭✭ lawred2


    150k sounds a lot for a kitchen extension and loft conversion...

    Is this a complex project?


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    Sounds fair, just surprising in a relatively short time frame. Begs the question of where things will be in another 12-18 months...


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    lawred2 wrote: »
    150k sounds a lot for a kitchen extension and loft conversion...

    Is this a complex project?

    It's really not, nor is the spec ridiculously high so scaling back on requirements won't make a huge difference - the labour costs seem to be what's driving it up. I guess we'll wait til we get all our tenders in and see if the early quotes are reflective of the market or not.


  • Registered Users Posts: 23,179 ✭✭✭✭ lawred2


    Scorlóg wrote: »
    It's really not, nor is the spec ridiculously high so scaling back on requirements won't make a huge difference - the labour costs seem to be what's driving it up. I guess we'll wait til we get all our tenders in and see if the early quotes are reflective of the market or not.

    Did you mean 40sq metre or 40sq feet?


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  • Registered Users Posts: 67 ✭✭ cyfac


    Just finishing my self build now started in April 2015 and i feel materials have jumped right back up in price i recently had to buy some 6m wavin sewer pipes and they had gone from 9euros to 14euros + vat while the lengths of steel mesh had gone from 28euros to 45euros + vat all types of insulation have also gone very expensive


  • Registered Users Posts: 54 ✭✭✭ Scorlóg


    lawred2 wrote: »
    Did you mean 40sq metre or 40sq feet?

    Sorry, 40sqm. But it's well under that.


  • Moderators, Home & Garden Moderators Posts: 10,092 Mod ✭✭✭✭ BryanF


    Scorlóg wrote: »
    Ok folks, this isn't meant to be a witch hunt or me having a go at local builders.

    To clarify - we were given a detailed tender summary from the builder in question in May 2015, not just a finger in the air estimate. I'm simply trying to assess two things:

    1. Have construction and related costs really escalated by 50% in 15 months?
    2. If so, is there currently a costs advantage to using a N.I. builder?

    We have a budget and we have to work to it. I'll happily hire an Irish builder who can bring the project in on budget. Any suggestions or recommendations? Feel free to PM.

    Thanks.

    1. No, but costs until recently were kept unrealistically low due to supply and demand in the construction industry - but now that builders are back in demand, they can charge a better rate for labour and mark up for risk/attendances etc.

    Our governments legislative move away from building control, pushing more responsibilities to the private sector is a major factor also.

    IMO you can look at this, similar to the insurance sector, bus strikes etc, we have several years of semi frozen labour rates and cutting corners (for example on paying tax, scaffolding, insurances, waste disposal, site cabins etc) this time is at an end in the bigger city's but still wide spread in rural Ireland.

    2. Insured to work in south ?
    Experienced in Irish reg?
    Travel and rent expenses? (Say 20 weeks for 2/3 fellas in Dublin?)
    References and seeing their work? Nice bit of travel for you..


  • Registered Users Posts: 245 ✭✭ eoinzy2000


    Get more prices. If its too dear, scale it back. Building is dear as feck. A reasonable "guess" at the minute is approx. 150 per square foot, with no or very little adverse site conditions. If you do it yourself, you could do it for 110 or 120. They are fully finished 'guesses'.


  • Moderators, Home & Garden Moderators Posts: 1,583 Mod ✭✭✭✭ kkelliher


    From someone who prices jobs everyday and receives tenders everyday (and have done so for last 17 years). Prices are generally not much higher now than they were 12 months ago. Throughout the entire downturn material prices have been rising yearly due in the main to the need for Ireland to import large amounts of materials and the effect of currency and oil markets. The labour market has shown signs of increase over the last 4/6 months but this has not yet mades it way to tenders as the tender market is still very price aggressive. A contractor may be paying more for his electrician now, but he is currently not able to pass this on in a competitive market (I see this changing quickly in the next 12 months as contractors wake up a little and stop racing each other to the bottom)

    To be specific on the OP's question. You have in a way completely shown why global per ft2 costing and builders estimates are not how to budget for a project. You should be getting as detailed a costing carried out by a QS/Builder at the outset as you can at the end. I regularly do cost plans for people following a €300/400 sketch consultation they may have had with an Architect or a sketch they produced themselves in order to give them a real life costing and yes it is always multiples of what they taught. There is a correct and logical way to run this costing process so people don't end up with planning they cant afford etc and it is as far from bar stool and ball park estimation as you can get. You need to bring cost and design together. They are equally as important as each other. A cheap building you don't like is about as useless as a building you love that you cant afford to build.

    Costing is simple if kept simple.

    The only way to cost your building is to measure and price your building (not someone elses, not averages, not from google and certainly not from those whose interest it is to keep a cost low......ie builders looking for a job)


  • Moderators, Home & Garden Moderators Posts: 1,583 Mod ✭✭✭✭ kkelliher


    eoinzy2000 wrote: »
    Get more prices. If its too dear, scale it back. Building is dear as feck. A reasonable "guess" at the minute is approx. 150 per square foot, with no or very little adverse site conditions. If you do it yourself, you could do it for 110 or 120. They are fully finished 'guesses'.

    Clarity in pricing is as important as the price itself. No point in having 5/6 prices when you dont know whats included or more importantly excluded from them. You need to take control of your tender, and schedule the works required so you have an apples with apples comparison of all tenders received. AAEAAQAAAAAAAAZvAAAAJGIwOTgxZTkyLTdjNmUtNGY4Ni1hNWY2LTMyOTkyZmU5YjM1ZQ.png?dl=0


  • Registered Users Posts: 4,091 ✭✭✭ Tefral


    kkelliher wrote: »
    From someone who prices jobs everyday and receives tenders everyday (and have done so for last 17 years). Prices are generally not much higher now than they were 12 months ago.

    I agree with all your other points and agree with this one to an extent but what i have noticed in the last 6months is the jobs at <750k are stagnating or getting a small bit cheaper the jobs at >750k+ there is a gap emerging.

    I think its down to the fact smaller builders are coming back online bringing fresh competition, but the bigger projects they cant go after so its the same people the whole time and they are busy so they are charging more.


  • Moderators, Home & Garden Moderators Posts: 1,583 Mod ✭✭✭✭ kkelliher


    Tefral wrote: »
    I agree with all your other points and agree with this one to an extent but what i have noticed in the last 6months is the jobs at <750k are stagnating or getting a small bit cheaper the jobs at >750k+ there is a gap emerging.

    I think its down to the fact smaller builders are coming back online bringing fresh competition, but the bigger projects they cant go after so its the same people the whole time and they are busy so they are charging more.

    i think it very much comes down to the tender panel selection and the responsibility of the design team on keeping it fresh. Having the same list all the time will increase costs like it does in any market. It always helps to have a few new faces in a pool.


  • Registered Users Posts: 11 ✭✭✭ tomcrows


    Surely it makes sense to get a minimum of 3 prices to make a sensible comparison. It is important to get a clearly defined specification at the outset so each contractor is pricing for the same requirements and make sure they are doing exactly that. It is up to you and your architect to ensure there are as few provisional costs as possible.

    I recently got 4 prices back for a full renovation with new two storey extension in Dublin. Price ranged from 215 to 300.

    You can potentially reduce costs by removing kitchen, or painting, or flooring from a tender offer and arranging that yourself.


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  • Registered Users Posts: 11 ✭✭✭ tomcrows


    Also, NI builders depends on your location. Some are willing to live on site for the duration of a build if facilities can be provided. With sterling so weak at the moment, there are advantages.


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