Site Costs


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Site Costs

Here is an overview of building site costs when
building a new home in Melbourne

Building site costs are often misunderstood and certainly used by some builders to baffle clients and extract more money. That is one of the 'smoke screens and mirrors' often used to make their home price seem cheaper.

We often see scenarios where a builder promises "free inclusions" only to find that the site costs have been loaded up to offset the cost of the so-called freebies. Many clients have come to us having had such an experience.

What we can promise you is that we do not load up the site costs to offset so-called special promotions or freebies.

We are not saying that site costs are not a genuine cost requirement, especially if the site has over one metre fall. It is more a question of what should be included in the base price and what can be expected to be in the site costs.

As far as we are concerned, the site-costs are the site-costs and we want them to be as low as possible. However, in fairness to all builders, there is a lot of consumer confusion about what work is included in the site costs and sometimes, clients do have a misguided expectation of what site works and the costs are.

Therefore, we believe it will cause you less heartache if you understand that there are two issues to do with the site:-

    1. Site infrastructure
    2. Site works

1. Site Infrastructure: this covers all the items that are required for the builder to commence and function on site.

Items such as, building permit and fees (not planning permits), builders construction and warranty insurance, engineers site and soil test reports, temporary security fencing, scaffold, portable toilet, driveway cross over protection.

All of these items are included in Prime-Metro's base price, whereas, many builders will take some or all of these out of their base price and add them into site-work costs. Hence, they make their base price seem lower. Check to make sure the above items are included.

The only items that are expected not to be in the base price are the actual site works, which is the second issue of this discussion.

Although...., sometimes site costs may be included. Sorry if that seems confusing. The point is that site infrastructure should be in the base price, not included as site costs or extras. It is a case of correctly identifying what is included in the base price.

One of the problems that you will encounter is the terminology. Site infrastructure, is not a term that is used in the building industry. We have used it here simply to try and point out what is expected to be in the base price for these issues.

2. Site Works: (also called site costs) should only associated with the treatment required to the site so that the home will sit at the right level, make the foundations/slab stable, protect against water with correct drainage, protect easements, protect the house from ember/bush fire attack and to protect neighbours foundations/fencing from your site.

The method to accurately determine what works are required is for a soil test, site report to prepared by an independent engineer and levels survey, which shows the fall of the land. Until these are completed, you should never believe that the site costs estimates are accurate or included, unless stated as 'included' in the building contract.

At Prime-Metro, we endeavor to make a reasonable estimates when quoting. However, until the soil and site reports are done, one can never know for sure. This of course assumes that the site works are not included and for Prime-Metro, sometimes they are included, especially for our tax investment property and complete homes in certain land estates.

As an example of not knowing until the soil test is completed, we have seen sites where 'land fill' has been used by the land developer to fill holes or drains and the client has been unaware when the land was purchased. The site was prepared to hide the fill and certainly the depth. The site seemed level and uncomplicated, only to find from the soil tests that significant fill has been used and so the site costs blow out. This situation albeit rare, is obviously a rude shock.

So here is a word of warning - when purchasing land, ask if there is any 'fill' on the site. And if there is, request (insist) on a 'compaction report' being provided. This is required to be made available to you. And if you give it to Prime-Metro before we quote, we can provide accurate site costs.

What site requirements create site costs?

Some or all of the following may be required:

  • For Prime-Metro, land fall above 300mm over the deemed building area. Note that for some builders this may be above 0mm.
  • Slab upgrades due to fall, fill and soil conditions
  • Root barriers
  • Retaining walls, (1m high and above require engineering)
  • Agricultural drains
  • Retaining walls
  • Additional soil/fill over slab area
  • Excess soil removal
  • Rock extraction and removal
  • Fire attack measures
  • Connection to service distances (water, gas, sewer)
  • Installment of services which are not present (water, gas, sewer)
  • Heritage overlays
  • Land estate covenants
  • Local authority (council, water, gas etc) requirements

Most builders will have a 'M' Class slab included in their base price. However, after receiving the soil test and engineers report, the slab may need to be upgraded to a 'H' class slab or a 'P' site.

H is may only be a few thousand dollars more but P stands for 'problem'. This could be due to trees which then require root barriers.

Root barriers are in simple terms, a trench full of concrete and concrete is expensive. Root barrier requirements will be determined by the distance to trees, quantity and size. There can be other reasons for it to be deemed a P site but too varied to discuss here. Suffice to say, a P site will add costs.

Cutting and/or filling of the site will also add costs. This incorporates such things as excavation to cut the site, fill to level where required and slab upgrades. Upgrading of the slab, in simple terms, means extra concrete and reinforcement. It may also include such requirements as additional concrete piers.

We don't plan on explaining the full details of the other components of site works, except to say that the relative severity of each requirement has its own price tag.


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