Volume house builders and the great Australian nightmare
The family home is often the greatest investment we will make in our lifetime. Not just in financial terms, but also in terms of emotional investment and time investment. For decades Australians have had a love affair with the detached house on a quarter acre block, built largely by the volume house builders. The golden years for these builders were no doubt the post war boom of the 1950’s and 1960’s when Australian cities were going through a spectacular growth spurt. In 2012 many volume builders are doing it tough. Urban sprawl has pushed new housing estates further and further from centres of activity and employment, whilst tough economic conditions and financial uncertainty continue to put the squeeze on the entire construction industry.
“Perhaps one of the most telling sign of the times, is that at least one volume builder is now offering a new car to entice buyers into a house and land package”
Off the plan
Volume house builders operate by providing a range of standard designs which are marketed and then selected by purchasers for placement on their selected block of land. By re-using architectural and engineering drawings across many houses, the design cost is diluted and a portion of this can be offered as a price incentive to buyers. Further savings can be made by carefully selecting the cheapest materials and ordering materials in large quantities.
However it is not all savings for the volume house builders as they also have expenses for operating in this market segment. Sales staff, television and newspaper marketing and in some cases sporting team sponsorship are all paid for from their sales.
Location, Location, Location
One of the most significant disadvantages to a volume house in a major capital city is that the locations available after fifty plus years of urban sprawl are now a substantial distance from the city. This brings with it a host of disadvantages and problems which are detailed more fully in the Urban Sprawl Debate part 1 and part 2
Excellent architecture has an intrinsic relationship with its location and immediate surrounds. This considered relationship enables the building to both contribute positively to the site and benefit from it. The most obvious way this is done is in positioning living spaces to the north such they can enjoy direct sunlight during the day, particularly in Winter. However off the plan volume housing, homogeneous in its design, is selected off the shelf, to be built on any block of any orientation.
“Design quality is the first casualty of a volume house builder’s business plan”
Volume houses are also designed to ensure maximum profits for the builders. Even the smallest reduction of price on a single component can have major cost implications on the builder who may build thousands of houses.
The Australian construction industry is largely made up of small businesses that specialize in a specific trade or skill. A majority of these people are skilled tradesmen who take pride in their work. Some however are inexperienced and a few (as per any profession) are complete shockers.
Due to the fragmented nature of the Australian building industry, it is very unusual for building contractors to do significant amounts of the constructing themselves. This is because it is their job to run the building site and coordinate, schedule and supervise the work of the subcontractors. The importance of the builder’s role in the coordination and supervision of the tradespeople cannot be understated. In the case of volume builders the site supervision can vary considerably. This can result in significant substandard work as subcontractors rush to get to the next job.
I once visited a site where a volume house was in the process being extended. Part of this process involved removing the cladding and plasterboard from a section of the back wall to reveal the existing timber frame. What this should have also revealed was the engineered structural timber or steel lintel above the doorway. What was revealed was three steel star pickets (the type used for gardening or temporary fencing) loosely tied together with a coat hanger and some builder mortar.
Based on a quick internet search customer dissatisfaction has a few common themes
- Uncertainty of timeframes for both starting and completion.
- Communication with customers, managers not returning calls when there are problem
- Hidden additional costs that were not properly explained up front
- Quality, construction defects and slow or no rectification of them.
- Excellent sale staff, lousy project staff once the customer is under a contract.
- Services and site clean up after final payment made
How to reduce the risks
If all of this has not put you off using a volume house builder here are some tips to help avoid some trouble.
- Get legal advice before signing any building contract. Make sure you are aware of your rights and responsibilities under the contract. Pay particular attention to liquidated damages (late penalties for the builder) and any clauses limiting the builders liability.
- If at all possible, pay for truly independent qualified inspections to be undertaken during the construction process and prior to making the final payment.
- Research your builder extensively. Online reviews
- Spend a significant amount of time reading and understanding the plans for the house you are paying for. If you are having trouble, try to find someone experienced who can explain them to you. Once you have signed a contract any changes will cost extra. (For example builders trying to claim $500 for a shelf above the fridge is not unheard of.)
- Make sure you are aware of the start and completion date and what the consequences are for both you and the builder.
- Regularly visit the site and take lots of photos.
- Take notes at every meeting, if the builder is also taking minutes ask for a copy to be provided. When this is done make sure that the minutes accurately reflect what was discussed.
- If you become uncomfortable with how the project is progressing seek independent help.
Building a new house should be an exciting time when your dreams are translated into a new reality. Be careful in who you turn to, to avoid your dream becoming a nightmare.
Architecture is for everyone
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