One of the most common and most expensive mistakes in home building is misunderstanding what your budget actually needs to include. It is easy to think of your budget as simply "the money I have for a home." In reality, once you account for GST, council fees, consultants, connections and contingencies, the amount left over for the actual construction can be significantly less than you expected.
Here is a simplified example. Say you are building a 300 square metre home at $2,500 per square metre plus GST, that is $750,000 plus GST before anything else is added. Add a sloping block requiring extra site work, luxury inclusions like a pool, landscaping and fencing, demolition of an existing structure, and other consultant fees, and your total budget allowance can easily climb past $1.1 million once GST is included. Someone who assumed $750,000 was enough could be caught out by hundreds of thousands of dollars.
That is why the very first conversation with your builder should be about your maximum budget, not your dream inclusions list. Work out what you can genuinely afford: what you have saved, what you can borrow, and what your repayments will realistically be if interest rates rise. Once you know that top line figure, share it honestly with your builder and designer. This is not a negotiating tactic you need to protect. A good builder uses your budget to guide sensible decisions from day one, rather than designing something beautiful that turns out to be unaffordable.
We have seen the alternative play out too many times. A couple falls in love with an architect's design, only to receive quotes from three separate builders, each roughly double their budget. The design then has to be cut back, costing more money and time, or abandoned altogether. It happens because no one told the designer what the ceiling actually was.
Before you talk to us about what to build, we would rather talk to you about what you can afford to build. It is a more useful conversation, and it means every idea we discuss after that point is one you can genuinely say yes to.
If you are starting to plan a new home or renovation anywhere in Perth's northern suburbs, get in touch with INH Perth North and we will help you work out your true build budget before you fall in love with a design that does not fit it.
