5/06/2009

5 June 2009

1.9% Drop in Construction Costs

Construction costs have dropped 1.9% in the first quarter of 2009 according to Archicentre, the building advisory service of the Australian Institute of Architects.

Releasing the Archicentre Quarterly Cost Guide, David Hallett, General Manager of Archicentre said Archicentre's predictions that a 5% to 15% drop in costs on custom designed homes and renovations over twelve months was on track. Mr Hallett said, "the current low level of interest rates continues to make home renovating an attractive proposition for home owners and the economy with tax free capital gains for the home owner and the majority of expenditure going to locally produced materials and labour a real stimulus package. "Changes to superannuation in the recent Federal Budget limiting contributions will provide a further economic boost to renovation as people use extra funds to improve their lifestyle. "The first home buyers grant is also having an impact on renovation as people buying existing homes have a bit more cash to improve their homes after purchase."

Mr Hallett said that with labour and material costs dropping for renovations the major issue facing many renovators and owner builders is management of the project, handling permit applications, ensuring work is done to the appropriate standard and ensuring tradespeople are coordinated.

"At Archicentre we are finding an increasing tendency for people halfway through projects to make contact when they realise they are out of their depth in managing an expensive renovation with costs blow outs.

"In the current economic climate cost control has become vital with banks tightening up lending."

Mr Hallett said one of the trends in the past quarter has seen a dramatic increase in the number of home owners, renovators and builders wanting to include energy and water saving features in their homes and renovations.

The Archicentre new Cost Guide is available to download from the Archicentre website at http://www.archicentre.com.au/pdf/2009WinterCostGuide.pdf

www.archicentre.com.au

Media Enquiries:
David Hallett General Manager Archicentre (03) 9819 4577 Mobile: 0439 439 115
Ron Smith Corporate Media Communications Archicentre (03) 9818 5700 Mobile: 0417 329 201