How long does it take to build a house?

While the time it takes to build a home will vary, there is something a lot more important than the wait time.

That's because there is a hidden cost when it comes to building a new home…

Holding costs.

Holding costs are expenses that homeowners incur while their new home is being built but they are not yet able to occupy or rent it out. 

These costs can add up quickly and should be factored into the overall budget for building a new home.

Managing Holding Costs

So here are some of the most common holding costs associated with building a new home that you need to be aware of:

The first is mortgage payments. If you are financing the construction of your new home, then you will have to make mortgage payments during the building process. 

These payments can add up quickly, especially if the construction process takes longer than anticipated.

And even though the home cannot be lived in, the homeowner will still be responsible for paying property taxes on the land. 

Depending on the location and the size of the block, these taxes can be a significant expense.

If you are downsizing and living in a rental property while your new home is being built, then apart from the obvious cost of rent each week you may also need to factor in the cost of storage during the construction process. 

Again, these storage costs can add up quickly, especially if you need to store large items like furniture or appliances.

In summary, the longer construction goes on, the more your costs will mount up which is why it’s so important to have a clear idea of exactly how long it will take to build your home before you sign a building contract.

That way you can budget for all those hidden expenses and avoid any nasty surprises.

So here are some guidelines for you to follow in order to avoid any unnecessary delays and also, to help you avoid engaging a building company that is set up to fail.

Firstly, make sure you have the specifications for your selections BEFORE you sign a contract.

A lot of building companies like to insert unrealistic allowances for selections in a building contract in an attempt to artificially lower the price. 

However, apart from costing you more money than you budgeted for, these selection choices also lead to delays in construction as they cannot be ordered ahead of time.

Ensure your builder has the right systems

Another tip is to sight the job schedule from your builder. 

It may surprise you to know that around 25% of builders do not plan out their builds using dedicated job scheduling software! 

Building a new home is incredibly complex, it involves bringing together materials and labour on a fixed timeline and a fixed budget.

I’ve been doing this for a long time now and I can tell you, I could not do it without dedicated systems that place orders for materials months in advance and organise subcontractors on site in a sequential order.

It’s not practical to do all of this planning in your head, which is why we use dedicated construction software that constantly updates the job schedule in real time as well as handling all of our client and supplier communication.

Without this software we would be running into delays every other week…

So make sure the builder you engage is set up for success rather than failure by asking them about their systems and asking to see their job schedule.

If they tell you they don't need it because they have been building for years…run!

The importance of cash reserves

Having said all of that though, the most common reason for delays in the current climate is builder cashflow.

Suppliers now want to be paid up front, and banks are taking longer and longer to pay stage claims.

As a result, builders that don't have significant cash reserves are facing unprecedented cash flow challenges.

And don’t assume that the big companies have bigger reserves than the smaller builders, Porter Davis is a great example of how Australia’s biggest building companies have come unstuck during the COVID boom so be very careful when choosing a builder.

The best thing to do is to check online reviews, if there are reviews being left by unhappy clients that are experiencing delays on their homes, that could be an early warning sign that the building company has cash flow challenges.

So, in summary, the time it takes to build a house will vary considerably depending on the size and complexity.

However, the most important thing for you as a future home owner is to avoid that timeframe being exceeded through poor planning, communication or your builders cash flow, so do your research before committing.

At the end of the day, it doesn’t matter if you are building your first home or if you have built many times before…

Designing a new home can be very overwhelming and when you hear new things for the first time, it's not easy to remember everything.

All the tips I’ve covered here are just a small sample of the information I need to share with you to ensure you are well informed when you get started on the design process... 

Which is why I put together a quick guide for you to download. 

The 7 Things You Must Know Before Designing A New Home.

It’s completely free, and it will help you to avoid any nasty surprises that can sneak up on you when building a custom home.

Just click on the link below and let me know the email address you'd like me to send it to.