June 2009 REPORT
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
June 2009 REPORT MASTER BUILDERS QUEENSLAND & CORDELL HOUSING COST INDEX FOR NEW HOME CONSTRUCTION IN SOUTH-EAST QUEENSLAND
Reed Construction Data
Page 1
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
CONTENTS 1 – EXECUTIVE SUMMARY ..................................................................................... 3 2 – MODEL DESIGN ................................................................................................... 3 3 – DATA ...................................................................................................................... 4 3.1 - Reed Construction Data.................................................................................. 4 3.2 - Building Cost Break-up .................................................................................. 4 3.3 - Building Cost Trade Break-up (% Value) .................................................... 5 4 – ANALYSIS SUMMARY........................................................................................ 6 4.1 - Building Costs.................................................................................................. 6 4.2 - Building Cost Annual Change........................................................................ 7 4.2 - Building Cost Break-up ($ Value / Annual % change)................................ 7 4.3 - Building Cost Trade Break-up ($ Value / Annual % change) .................... 8
Reed Construction Data
Page 2
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
1 – EXECUTIVE SUMMARY This report is the second quarterly analysis for 2009 of the Master Builders Queensland & Cordell Housing Cost Index for new home construction in South-East Queensland. It shows an increase in housing costs of 6.56% over the previous year. The cost of the statistical model increased over the year from $277,338 in May 2008 to $295,544 in May 2009. The rise of $18,206 which represents an increase of 6.56%. Over the May 2007 to May 2008 period the cost of building new homes had risen $14,312 which represented a 5.44% increase. The Cost Model is produced by Reed Construction Data on behalf of the Master Builders Queensland to monitor changes that affect the cost of new housing within South-East Queensland. The Master Builders Queensland (QMBA) is the largest employer association in Queensland, and represents the interests of businesses operating within the building and construction industry. Reed Construction Data is Australia’s market leader in construction-based information, providing authoritative costing information for construction projects. The extensive database breaks costs down into material, labour, plant costs, alongside professional and government fees and charges.
2 – MODEL DESIGN The model chosen for this project is a single storey brick veneer home, typical of many constructed in today’s market. At just over 200 square metres, the home consists of four bedrooms; a main bathroom, with an en-suite to the master bedroom; a double lock-up garage with internal access; a large family room, with formal lounge and dining rooms at the front of the home. All bedrooms have built-in wardrobes, with the main having a walk-in style wardrobe. There is a courtyard area flowing from the family room suitable for outdoor entertaining. Following the March 2006 decision to restrict the use of electric storage hot water systems, a revision to the statistical model replaces the electric HWS with a continuous gas system. As of January 2007 the model includes a 5,000 litre water storage tank which supplies water to the laundry, toilets and external taps.
Reed Construction Data
Page 3
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
3 – DATA 3.1 - Reed Construction Data The data used for construction costs associated with the Statistical Model has been calculated using the Cordell Queensland Housing Building Cost Guide. The database of information is researched and updated on a daily basis, capturing movements in labour, material, plant hire and fees and charges. This information is published quarterly in the Cordell Building Cost Guide, and on the Internet via the Reed Construction Data e-Costing and Estimator programs. Major insurance companies also use the database for partial and full replacement costs of buildings.
3.2 - Building Cost Break-up Graph 1 - Building Cost Break-up Ex GST (May 2009)
PROFESSIONAL FEES 9.0%
GOVERNMENT FEES & CHARGES 3.8%
LABOUR 27.7%
SUPPLY & FIX 11.5%
PLANT 3.6%
MAT ERIAL 44.4%
The analysis of Building Costs broken down into key areas, as displayed in Graph 1, clearly illustrates the impact of all factors. The traditional split of materials and labour contributing to the majority of the cost still holds. The Supply & Fix portion is calculated from rates attributing to both Labour and Material costs.
Reed Construction Data
Page 4
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
3.3 - Building Cost Trade Break-up (% Value) Graph 2 - Building Cost Trade Break-up (May 2009) PROFESSIONAL FEES PRELIMINARIES EXCAVAT ION CONCRET E BRICKWORK CARPENT RY INSULAT ION JOINERY GLAZING HARDWARE ROOFING & ROOF PLUMBING WINDOWS DOORS PLAST ERING T ILING FLOOR COVERINGS PAINT ING PLUMBING & DRAINAGE ELECT RICAL EXT ERNAL WORK 0%
2%
4%
6%
8%
10%
12%
14%
The analysis of Building Costs broken down into Trade categories, as displayed in Graph 2, demonstrates the impact various trades have on the costs of a typical new house. Preliminaries account for the largest portion of the cost, with core categories of concrete, brickwork, carpentry, joinery, roofing and plumbing and drainage combining to provide a large percentage of the cost.
Reed Construction Data
Page 5
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
4 – ANALYSIS SUMMARY 4.1 - Building Costs Quarterly Index of Building Costs Graph 3 (February 2000 to May 2009) 175.00
Building Cost s
170.00 165.00 160.00 155.00
Index Points
150.00 145.00 140.00 135.00 130.00 125.00 120.00 115.00 110.00 105.00
08
Fe b09
A ug -
07
Fe b08
A ug -
06
Fe b07
A ug -
05
Fe b06
A ug -
04
Fe b05
A ug -
03
Fe b04
A ug -
02
Fe b03
A ug -
01
Fe b02
A ug -
00
Fe b01
A ug -
Fe b00
100.00
Q uarte rs
Building Costs
Quarterly Percentage change of Building Costs Index Graph 4 (February 2000 to May 2009) Q uarte rl y Pe rce ntage Ince ase in Building C osts
14.00% 12.00%
Quarterly % change
10.00% 8.00% 6.00% 4.00% 2.00% 0.00%
Fe b09
08 A ug -
Fe b08
07 A ug -
Fe b07
06 A ug -
Fe b06
05 A ug -
Fe b05
04 A ug -
Fe b04
03 A ug -
Fe b03
02 A ug -
Fe b02
01 A ug -
Fe b01
00 A ug -
Fe b00
-2.00%
Q uarte rs
February 2000 = 100 index points Source: Reed Construction Data
Using an index of 100 points starting in February 2000, Graph 4 above shows the difference in quarterly changes of construction costs. The June 2009 quarter sees the Index of Building Costs increased 1.14% over the quarter bringing the annual increaese to 6.56%.
Reed Construction Data
Page 6
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
4.2 - Building Cost Annual Change Annual Percentage change of Building Costs Index Graph 5 (February 2001 to May 2009) Q uarte rly Pe rce ntage Ince ase in Building C osts
14.00% 12.00%
Annual % change
10.00% 8.00% 6.00% 4.00% 2.00% 0.00%
08
-0 9 Fe b
-0 8
ug -
Fe b
A
07
-0 7
ug A
06
Fe b
-0 6
ug A
05 ug -
Fe b
-0 5
A
04
Fe b
03
-0 4
ug A
Fe b
02
-0 3
ug A
Fe b
-0 2
ug A
01
Fe b
-0 1
ug A
00
Fe b
ug A
Fe b
-0 0
-2.00%
Q uarte rs
Graph 5 shows the annual change in building costs for the period February 2001 to May 2009 at quarterly intervals. The Index of building costs has increased 10.39 index points over the pervious year. This represents an increase of 6.56%. The average of the four preceeding quarters annaul change rates was slightly lower at 6.48%.
4.2 - Building Cost Break-up ($ Value / Annual % change) May 2009
Annual
COST (ex GST)
% Change
LABOUR
$74,527
▲ 1.14%
MATERIAL
$119,270
▲ 11.62%
PLANT
$9,672
▲ 2.90%
SUPPLY & FIX
$30,888
▲ 7.45%
PROFESSIONAL FEES
$24,167
▲ 4.45%
GOVERNMENT FEES & CHARGES
$10,153
▼ 1.44%
GST
$26,868
▲ 6.56%
TOTAL
$295,544
▲ 6.56%
TRADE
Reed Construction Data
Page 7
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
4.3 - Building Cost Trade Break-up ($ Value / Annual % change) May 2009
Annual
COST (ex GST)
% Change
PROFESSIONAL FEES
$8,027
▲ 6.49%
PRELIMINARIES
$32,052
▲ 2.36%
EXCAVATION
$8,415
▲ 0.95%
CONCRETE
$29,968
▲ 17.95%
BRICKWORK
$17,033
▲ 0.31%
CARPENTRY
$20,640
▲ 18.09%
INSULATION
$2,788
▲ 3.58%
JOINERY
$20,939
▲ 1.56%
GLAZING
$2,418
▲ 6.44%
HARDWARE
$1,680
▲ 0.59%
ROOFING & ROOF PLUMBING
$19,608
▲ 12.48%
WINDOWS
$4,228
▲ 0.10%
DOORS
$6,735
▲ 7.13%
PLASTERING
$17,871
▲ 15.94%
TILING
$5,336
▲ 1.19%
FLOOR COVERINGS
$11,046
▲ 1.79%
PAINTING
$14,417
▲ 4.81%
PLUMBING & DRAINAGE
$24,992
▲ 0.78%
ELECTRICAL
$6,851
▲ 0.61%
EXTERNAL WORK
$13,637
▲ 5.07%
TOTAL (Excluding GST)
$268,676
▲ 6.56%
TRADE
The trade break-up and corresponding percentage changes from the same time last year highlight upward movements in all trades.
Reed Construction Data
Page 8
June 2009
June 2009 REPORT MASTER BUILDERS QUEENSLAND & CORDELL HOUSING COST INDEX FOR NEW HOME CONSTRUCTION IN SOUTH-EAST QUEENSLAND
Reed Construction Data
Page 1
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
CONTENTS 1 – EXECUTIVE SUMMARY ..................................................................................... 3 2 – MODEL DESIGN ................................................................................................... 3 3 – DATA ...................................................................................................................... 4 3.1 - Reed Construction Data.................................................................................. 4 3.2 - Building Cost Break-up .................................................................................. 4 3.3 - Building Cost Trade Break-up (% Value) .................................................... 5 4 – ANALYSIS SUMMARY........................................................................................ 6 4.1 - Building Costs.................................................................................................. 6 4.2 - Building Cost Annual Change........................................................................ 7 4.2 - Building Cost Break-up ($ Value / Annual % change)................................ 7 4.3 - Building Cost Trade Break-up ($ Value / Annual % change) .................... 8
Reed Construction Data
Page 2
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
1 – EXECUTIVE SUMMARY This report is the second quarterly analysis for 2009 of the Master Builders Queensland & Cordell Housing Cost Index for new home construction in South-East Queensland. It shows an increase in housing costs of 6.56% over the previous year. The cost of the statistical model increased over the year from $277,338 in May 2008 to $295,544 in May 2009. The rise of $18,206 which represents an increase of 6.56%. Over the May 2007 to May 2008 period the cost of building new homes had risen $14,312 which represented a 5.44% increase. The Cost Model is produced by Reed Construction Data on behalf of the Master Builders Queensland to monitor changes that affect the cost of new housing within South-East Queensland. The Master Builders Queensland (QMBA) is the largest employer association in Queensland, and represents the interests of businesses operating within the building and construction industry. Reed Construction Data is Australia’s market leader in construction-based information, providing authoritative costing information for construction projects. The extensive database breaks costs down into material, labour, plant costs, alongside professional and government fees and charges.
2 – MODEL DESIGN The model chosen for this project is a single storey brick veneer home, typical of many constructed in today’s market. At just over 200 square metres, the home consists of four bedrooms; a main bathroom, with an en-suite to the master bedroom; a double lock-up garage with internal access; a large family room, with formal lounge and dining rooms at the front of the home. All bedrooms have built-in wardrobes, with the main having a walk-in style wardrobe. There is a courtyard area flowing from the family room suitable for outdoor entertaining. Following the March 2006 decision to restrict the use of electric storage hot water systems, a revision to the statistical model replaces the electric HWS with a continuous gas system. As of January 2007 the model includes a 5,000 litre water storage tank which supplies water to the laundry, toilets and external taps.
Reed Construction Data
Page 3
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
3 – DATA 3.1 - Reed Construction Data The data used for construction costs associated with the Statistical Model has been calculated using the Cordell Queensland Housing Building Cost Guide. The database of information is researched and updated on a daily basis, capturing movements in labour, material, plant hire and fees and charges. This information is published quarterly in the Cordell Building Cost Guide, and on the Internet via the Reed Construction Data e-Costing and Estimator programs. Major insurance companies also use the database for partial and full replacement costs of buildings.
3.2 - Building Cost Break-up Graph 1 - Building Cost Break-up Ex GST (May 2009)
PROFESSIONAL FEES 9.0%
GOVERNMENT FEES & CHARGES 3.8%
LABOUR 27.7%
SUPPLY & FIX 11.5%
PLANT 3.6%
MAT ERIAL 44.4%
The analysis of Building Costs broken down into key areas, as displayed in Graph 1, clearly illustrates the impact of all factors. The traditional split of materials and labour contributing to the majority of the cost still holds. The Supply & Fix portion is calculated from rates attributing to both Labour and Material costs.
Reed Construction Data
Page 4
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
3.3 - Building Cost Trade Break-up (% Value) Graph 2 - Building Cost Trade Break-up (May 2009) PROFESSIONAL FEES PRELIMINARIES EXCAVAT ION CONCRET E BRICKWORK CARPENT RY INSULAT ION JOINERY GLAZING HARDWARE ROOFING & ROOF PLUMBING WINDOWS DOORS PLAST ERING T ILING FLOOR COVERINGS PAINT ING PLUMBING & DRAINAGE ELECT RICAL EXT ERNAL WORK 0%
2%
4%
6%
8%
10%
12%
14%
The analysis of Building Costs broken down into Trade categories, as displayed in Graph 2, demonstrates the impact various trades have on the costs of a typical new house. Preliminaries account for the largest portion of the cost, with core categories of concrete, brickwork, carpentry, joinery, roofing and plumbing and drainage combining to provide a large percentage of the cost.
Reed Construction Data
Page 5
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
4 – ANALYSIS SUMMARY 4.1 - Building Costs Quarterly Index of Building Costs Graph 3 (February 2000 to May 2009) 175.00
Building Cost s
170.00 165.00 160.00 155.00
Index Points
150.00 145.00 140.00 135.00 130.00 125.00 120.00 115.00 110.00 105.00
08
Fe b09
A ug -
07
Fe b08
A ug -
06
Fe b07
A ug -
05
Fe b06
A ug -
04
Fe b05
A ug -
03
Fe b04
A ug -
02
Fe b03
A ug -
01
Fe b02
A ug -
00
Fe b01
A ug -
Fe b00
100.00
Q uarte rs
Building Costs
Quarterly Percentage change of Building Costs Index Graph 4 (February 2000 to May 2009) Q uarte rl y Pe rce ntage Ince ase in Building C osts
14.00% 12.00%
Quarterly % change
10.00% 8.00% 6.00% 4.00% 2.00% 0.00%
Fe b09
08 A ug -
Fe b08
07 A ug -
Fe b07
06 A ug -
Fe b06
05 A ug -
Fe b05
04 A ug -
Fe b04
03 A ug -
Fe b03
02 A ug -
Fe b02
01 A ug -
Fe b01
00 A ug -
Fe b00
-2.00%
Q uarte rs
February 2000 = 100 index points Source: Reed Construction Data
Using an index of 100 points starting in February 2000, Graph 4 above shows the difference in quarterly changes of construction costs. The June 2009 quarter sees the Index of Building Costs increased 1.14% over the quarter bringing the annual increaese to 6.56%.
Reed Construction Data
Page 6
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
4.2 - Building Cost Annual Change Annual Percentage change of Building Costs Index Graph 5 (February 2001 to May 2009) Q uarte rly Pe rce ntage Ince ase in Building C osts
14.00% 12.00%
Annual % change
10.00% 8.00% 6.00% 4.00% 2.00% 0.00%
08
-0 9 Fe b
-0 8
ug -
Fe b
A
07
-0 7
ug A
06
Fe b
-0 6
ug A
05 ug -
Fe b
-0 5
A
04
Fe b
03
-0 4
ug A
Fe b
02
-0 3
ug A
Fe b
-0 2
ug A
01
Fe b
-0 1
ug A
00
Fe b
ug A
Fe b
-0 0
-2.00%
Q uarte rs
Graph 5 shows the annual change in building costs for the period February 2001 to May 2009 at quarterly intervals. The Index of building costs has increased 10.39 index points over the pervious year. This represents an increase of 6.56%. The average of the four preceeding quarters annaul change rates was slightly lower at 6.48%.
4.2 - Building Cost Break-up ($ Value / Annual % change) May 2009
Annual
COST (ex GST)
% Change
LABOUR
$74,527
▲ 1.14%
MATERIAL
$119,270
▲ 11.62%
PLANT
$9,672
▲ 2.90%
SUPPLY & FIX
$30,888
▲ 7.45%
PROFESSIONAL FEES
$24,167
▲ 4.45%
GOVERNMENT FEES & CHARGES
$10,153
▼ 1.44%
GST
$26,868
▲ 6.56%
TOTAL
$295,544
▲ 6.56%
TRADE
Reed Construction Data
Page 7
June 2009
Master Builders Queensland & Cordell Housing Cost Index – New Home Construction
4.3 - Building Cost Trade Break-up ($ Value / Annual % change) May 2009
Annual
COST (ex GST)
% Change
PROFESSIONAL FEES
$8,027
▲ 6.49%
PRELIMINARIES
$32,052
▲ 2.36%
EXCAVATION
$8,415
▲ 0.95%
CONCRETE
$29,968
▲ 17.95%
BRICKWORK
$17,033
▲ 0.31%
CARPENTRY
$20,640
▲ 18.09%
INSULATION
$2,788
▲ 3.58%
JOINERY
$20,939
▲ 1.56%
GLAZING
$2,418
▲ 6.44%
HARDWARE
$1,680
▲ 0.59%
ROOFING & ROOF PLUMBING
$19,608
▲ 12.48%
WINDOWS
$4,228
▲ 0.10%
DOORS
$6,735
▲ 7.13%
PLASTERING
$17,871
▲ 15.94%
TILING
$5,336
▲ 1.19%
FLOOR COVERINGS
$11,046
▲ 1.79%
PAINTING
$14,417
▲ 4.81%
PLUMBING & DRAINAGE
$24,992
▲ 0.78%
ELECTRICAL
$6,851
▲ 0.61%
EXTERNAL WORK
$13,637
▲ 5.07%
TOTAL (Excluding GST)
$268,676
▲ 6.56%
TRADE
The trade break-up and corresponding percentage changes from the same time last year highlight upward movements in all trades.
Reed Construction Data
Page 8
June 2009
