In residential construction, effective cost management and risk mitigation hinge on thorough pre-construction planning. Aaron Tass from Tass Construction Group underscores that controlling costs is best achieved before construction begins, emphasizing that the majority of expenses are tied to labor rather than materials. By prioritizing detailed documentation and early builder involvement, homeowners can significantly reduce the risk of budget overruns and project delays.
Understanding Cost Factors and Mitigating Risks
When it comes to residential construction, the key to controlling costs and avoiding timeframe blowouts lies in thorough pre-construction planning. According to Aaron Tass of Tass Construction Group, the critical phase to manage costs is before construction begins. “Once you’re under construction, it tends to be too late,” Aaron emphasises.
Labour costs account for approximately 70% of construction expenses, while materials make up only about 30%. Homeowners often think that choosing cheaper materials like taps and tiles can significantly reduce costs, but these changes only make a small impact on the overall budget. Instead, focusing on controlling the scope of the project during the pre-construction phase is crucial. By having detailed documentation and a clear understanding of the project scope, potential cost overruns can be minimised.
The Importance of Detailed Documentation
Engaging an architect to provide comprehensive documentation is a vital step. Quality documentation helps builders firm up prices and ensures that fewer changes are needed once construction starts. Aaron notes, “If the Builder can help provide some guidance around cost-saving alternatives before you start, you alleviate ambiguity and reduce the risk of variations during the project.”
Addressing Labour Shortages and Supply Chain Constraints
The construction industry has faced significant challenges due to labour shortages and supply chain constraints, particularly post-COVID-19. While supply chain issues have improved, labour shortages remain a concern. Aaron predicts that new legislation under the Labor government will further impact the residential and commercial construction markets, potentially worsening the labour shortage.
To combat these issues, Tass Construction Group employs their own internal carpentry team rather than subcontracting. This approach not only helps with quality control but also ensures a steady supply of skilled labour. For other trades, they maintain long-term relationships with reliable subcontractors, ensuring consistent quality and availability.
The Benefits of Early Builder Involvement
Involving a builder early in the design and documentation stages can significantly benefit the project. Builders can provide high-level ballpark pricing during the concept stage and more accurate estimates as the plans develop. This ongoing collaboration helps keep the project within budget and allows for adjustments before finalising the design. Aaron explains, “It’s more than just giving a number; it’s about understanding key priorities and making cost-benefit trade-offs.”
Integrated Design-Build Approach
As a design-build firm, Tass Construction Group offers an integrated approach that combines design and construction under one roof. This method streamlines communication and decision-making, allowing for quick resolution of design and construction issues. Aaron highlights, “Maintaining design intent while managing costs is easier when the design and construction teams are closely aligned.”
Contract Types and Their Implications
Understanding different contract types is essential for homeowners. Fixed-price contracts offer firm pricing but may not account for fluctuations in material costs. Cost-plus contracts shift the risk of price increases to the homeowner, potentially resulting in lower initial costs but higher overall risk. A hybrid approach, which includes fixed prices for most items but provisions for variable costs like excavation, can provide flexibility while keeping the lender satisfied.
Future Cost Predictions and Homeowner Preparedness
While material prices are stabilising, labour costs are expected to continue rising. Aaron advises homeowners not to wait for prices to drop significantly. “Construction prices are not likely to decline significantly, so delaying projects might not be beneficial,” he cautions. Instead, he recommends investing in thorough pre-construction planning and seeking fixed-price contracts with detailed documentation to minimise risks and ensure project timelines are met.
In conclusion, minimising residential building costs and avoiding timeframe blowouts requires meticulous planning, detailed documentation, early builder involvement, and a strategic approach to labour and supply chain management. By adopting these practices, homeowners can achieve their dream homes within budget and on schedule.
About Aaron Tass and Tass Construction Group
Aaron Tass is a key figure at Tass Construction Group, a multi-award-winning boutique design and construct firm specialising in custom new builds and high-end renovations in the beautiful suburbs of Sydney. The Tass brothers and their team are the people behind the houses you love - offering an in-house design service, they aren’t your average builders. They are a design-focused firm taking on only a handful of projects each year within the luxury residential sector, winning awards for projects across both major renovations and custom new builds.
Recognition: In 2023, Tass Construction Group was a NSW Finalist in the NSW Housing Industry Association (HIA) awards for ‘Emerging Builder’, ‘Professional Builder’, and ‘Renovation 800K – 1.2M’ awards, and NSW Housing Industry Association HIA Award Winners for ‘Custom New Build 1.2M to 1.5M’, ‘Renovation 400K – 800K’, and ‘Bathroom up to 25K’ awards.
For more information, visit www.tasscg.com.