So your development strategy calls for a new build.

If the very idea of diving into a residential build is giving you nightmares you’re not alone.

Construction costs shot up by more than 10% in 2022, the largest annual increase on record according to CoreLogic.

Thankfully price increases for materials and labour are easing, but it pays to be proactive when you’re budgeting for a build.

Today I’ve got some tips for how you can save money on both construction and fit-out.

1. Follow the KISS principle

There are some pretty cool house designs out there, and it can be tempting to have your architect or draftsperson design a head-turning house, but keep in mind that unique designs usually call for big bucks.

When it comes to building on a budget, keep it simple, stupid.

Box-on-box construction is actually the cheapest way of doing a two-storey dwelling. Picture a cardboard box, then place another cardboard box of exactly the same size on top. That’s the most economical way of building a double-storey home from an engineering point of view.

Yes, it can look boring, so you’ll need to come up with ways to break up those walls.

But at least you won’t be forking out for challenging features like cantilevered awnings, balconies, and verandahs. Even building a smaller box on top of the ground floor requires a sub-frame, which equals more money, but it can be a way to make a house more visually appealing without completely blowing the budget.

2. Try value engineering

You might have heard me use the term value engineering. So what is it?

It's all about getting the same look and feel of a high-end finish without paying the high price tag.

One way to do this is by exploring alternatives to brand names. You can often find similar quality products from lesser-known brands that offer the same thing at a lower cost. Think about it – companies have to spend big dollars on marketing their product to create an instantly recognisable brand. And you’ll help to pay their marketing bill when you choose those brand-name products.

Engineered stone is a great example. You can swap out your Caesarstone, Silestone and Quantum Quartz for similar benchtops from local operators without the advertising overspend. Just make sure their product comes backed with a decent warranty.

Speaking of warranties, I want to give you a tip here about sourcing materials from overseas. While it may seem like a good idea to import from China or source marble from India, you might then be stuck with warranty obligations. This is because your builder may make the reasonable claim that he’s not responsible if something goes wrong with that product. My advice is to stick with local suppliers and run the options past your builder if you’re unsure about warranties and guarantees.

3. Spend on the areas that matter

It’s easy to spend more money than you need to on every area of the house, so it’s a good idea at the outset to prioritise where you will allocate your funds.

Your best bet is to focus on the areas that actually matter.

I reckon bathrooms, kitchens and lighting are the big wow factors in a home, so don’t skimp on these.

It might also be worth upsizing your rooms. Most buyers will love you for delivering bigger rooms, so make the most of the space you have. While a 3-metre by 3-metre bedroom may seem large enough, opting for a 4-metre x 4-metre room may only cost a little extra but could up your sale price by more than your spend by offering more value to potential buyers.

One service you could try if you’re deliberating room sizes and floorplan flow is a floorplan walkthrough. Companies like lifesizeplans.com can project your plans onto a warehouse floor so you can get a feel for the real-life scale of each room.

Just keep in mind that there are key room spans that, if exceeded, can significantly increase material costs. Ask your builder for more information.

4. Choose off-the-shelf

I’m sure you’re familiar with the concept of economies of scale.

It's basically a fancy way of saying that as a business produces more and more goods, the cost of producing each unit goes down. That’s how suppliers like Bunnings can offer you great prices – they’re buying in huge quantities and selling to an equally big customer base.

So rather than having something custom-made for your building project, aim to buy it off-the-shelf.

Take windows. These are a major cost in a build, so if you can use standard-sized windows instead of custom-built ones your bill is going to be instantly more palatable. It’s the same deal with vanities, shower screens, and doors. If you buy these off-the-shelf, they’ll always be cheaper than having them made to your size specifications.

5. Consider a project builder

When choosing a builder, there are two main options: project builders and small builders. Project builders are typically large companies that do a high volume of home building each year. Because they build so many homes, they have more buying power and can often get better deals on materials and labour. They also tend to use mass manufacturing techniques, such as pre-fabrication, to streamline the building process and make it more cost-effective.
You can read more about the pros and cons of using a project builder here.

6. Avoid variations

This is where so many people come unstuck. Even with a fixed price building contract, if you ask your builder to move the location of the bathtub, add an extra 100mm to the ceiling height or widen the front balcony after the contract is signed and construction has begun, he’ll issue a variation and you’ll need to find more money.

To avoid variations and additional costs, it’s super important to scope everything out really well. Check, double check, and triple check everything before starting construction.

So there you have it, folks! Hopefully these tips will help you to save money on your build without sacrificing the overall quality and functionality of the finished product. Happy building!