"Oh, but it's so expensive....."

Yes. Of course, it is...

Understanding Building Costs

In many cases, the cost of building is completely justified. Almost all professionals and builders in the construction industry face competitive pressures. They must compete with other builders and professionals, which helps level the playing field. However, quoting for a construction project is complex.

Factors Influencing Quotes

Builders quote based on several factors:

1. Current material and labour costs.

2. Expected future costs for materials and labour.

3. Estimated duration of the project.

4. How the quality level of the specific project will affect these timings. For example, imported stone has a six-week lead time.

   
   

There are also numerous other factors that contribute to project costs.

Unforeseen Influences

Building and planning consents, weather conditions, logistics, energy costs, and equipment replacement are all relevant. For instance, if a builder's nail gun fails midway through a project, they must drop everything to replace it. This leads to lost time and revenue, as well as the opportunity costs of not being able to source the best price due to the urgent need for a replacement.

The Relative Nature of Costs

Having reached this point, you may be wondering, "What's the main argument?" My point is that the cost of everything is relative to the situation you find yourself in. The cost of building with one builder or designing a home with a designer depends on various factors—some known and others not. For example, material costs are easier to understand, but factors such as their workload or overheads can be more elusive.

Professionals may only have a 60-80% understanding of what is likely to happen during your project, leaving 20% as an estimate or educated guess.

Perception of Value

It's surprising when people say, "That’s too expensive," regarding professional fees or final quotes for home builds. Yet, they are willing to pay $45 for dinner or $100,000 for a vehicle. This reflects a misunderstanding of value. When did we start undervaluing the professionals and builders responsible for our homes and workplaces? This trend has been developing over the last decade as manufacturing was outsourced and lower-priced goods became available. But that's a topic for another blog.

The Importance of Expertise

Let’s delve into the concept of value. When I visit a dentist, I pay between $160 and $350 to have a tooth removed. I make this choice because the dentist has the knowledge, specialist equipment, and medications to make the procedure as painless as possible and to address any ongoing issues. Although I could attempt the procedure myself using pliers, I am aware that the risks far exceed the cost of seeing an expert.

So, given this scenario, why would I take shortcuts that may lead to problems affecting me and my family? A structural failure in my home could be catastrophic. It’s common sense to avoid such risks, yet many people still choose to save money at the expense of their safety and wellbeing.

Cost Examples

Consider the price of a block of butter. In 1980, it was approximately $1.00 to $2.00. Today, the cost ranges from $2.00 to $5.00. The fact that you can buy butter now, for not much more than you would have in 1980, can be attributed largely to advancements in technology.

Producing butter is cheaper now than it was in the past due to improved processes and equipment. While farmers are compensated more for their cream, the costs of transport and feeding cows have also risen. Yet, the consumer often overlooks these factors because the final product remains the same.

The Changes in Building Processes

The construction process has also evolved. While the methods of building remain similar, the efficiency of the process has significantly increased. However, the expectation for cheaper prices in light of this efficiency is not reasonable. Such a perspective is nonsensical!

You might argue, "Revell, you're making this point because you benefit financially from it." Yes, that is true. However, I am equally invested in building high-quality, energy-efficient homes that will last beyond my lifetime. This concern is paramount!

If we want to prevent social collapse, we must ensure that the homes we inhabit are safe and healthy. These homes should offer higher levels of insulation, ventilation, and natural light than the National Construction Code requires. You cannot enhance the collective standard of living by adhering only to minimum requirements. It may cost more initially, but the benefits will materialize over many years. If the average home will cost $2 million in a decade, let's ensure that what is built is truly exceptional.

Signing off,

Revell