Homeowners stare down rising costs to build their dream home

25 February 2022

As construction costs grow at the fastest rate in 12 years and housing affordability drops to record lows, looming changes to the NCC 2022 don’t bode well for builders or homeowners.

The changes relate to accessible housing and energy efficiency and while there is no denying that changes are needed to make homes more accessible for elderly homeowners and those with a disability and to ensure more sustainable homes into the future, something has to give. The changes as they are currently being proposed are impractical, lack detail and will ultimately equate to a higher cost – which comes at a time when builders and homeowners are already facing rapidly rising costs.

Master Builders Deputy CEO, Paul Bidwell said the increase to construction costs is the worst seen in many years, with no end in sight.

“ABS figures suggest prices have risen in Brisbane only by 12.9% in the last 12 months; however, anecdotal reports from the industry suggest these figures are conservative, with increases more to the tune of 20-25%,” Mr Bidwell said.

“Our estimates, based on feedback from builders experienced in accessible housing work, are that these changes will add another $8,000, as a minimum, to the cost of a new home. This is in addition to the energy efficiency changes which could add up as much as $20,000 to the cost of construction due to higher glazing requirements and increased ceiling and wall insulation to meet the 7-star requirements for new homes.

“With the cost hikes and trade and material shortages they are already facing, builders and homeowners simply can’t afford to wear these extra costs right now.

“The changes aren’t just about the increased cost. The reality is that if the technical issues and concerns we’ve raised aren’t addressed, the changes won’t have the desired impact for those they are trying to benefit anyway.”

Master Builders and the industry have provided significant feedback during the consultation process and while it’s true the government is listening; action is needed now before it’s too late.

“It’s simple things that are going to put builders and in turn their clients into an impossible position when building starts,” Mr Bidwell added.

“For example, the proposed changes conflict with other NCC requirements for drainage, weatherproofing and termites, which could lead to a bespoke solution being required for every home, and that could be to the tune of approximately $2,000 – another added cost.

“Another example is a hobless, step free shower will be required – a solution many builders avoid as they are a known waterproofing risk.

“On the energy efficiency front, the requirements mean the addition of double or high-performance glazing, extra insulation to walls, roof spaces and sub-floors, and on-site renewables to offset the energy consumption of air-conditioning, swimming pools, lighting and heated water systems.

“These are just a few of examples – but when you look at the bigger picture, they amount to significant issues and costs which could make or break a build for some homeowners.

“The other thing that’s required is time,” Mr Bidwell added.

“A transition period of at least three years from when provisions are adopted is essential for the industry to plan for the changes.”

Major Sponsors

BUSSQ Truecore and Colorbond logos QLeave Construction Skills Queensland Xact Accounting Logo