With 10 minutes to spare it's the Saturday Open Thread. This week's conversation starter: Shoddy building standards over the past 7 years.
18 comments:
JDog
said...
Built twice in this time period. The first was an unmitigated disaster, with the erstwhile hilarious consequence of a wheel being stolen off my wife's car, because a sub-contractor had not been paid by the main contractor.
The second build basically fixed the first, because the latent defects clause and legal framework allows you very little comeback against a builder.
I've heard so many stories like yours JDog, That's why I intend to build the damn thing myself when the time comes. Bricklaying, plastering tiling and all that isn't so hard. It isn't even hard to do it right. What you're supposedly paying a builder for is to do it right AND fast and that's not so easy if the number of builders out there who fail to do it is anything to go by.
My outlook is that just like everything else: it's not getting any cheaper.
The 3 main ingredients: steel, concrete and electricity all have gone through the roof in the last couple of years.
I think that the days of the bakkie builder are numbered. These are the guys suffering the most through the building recession. Their margins are paper-thin now.
So if it is any consolation the guy that did our first build (hell even the poor guy who did the second) are now broke and looking for work.
On building costs - I know the price per square metre varies based on design and finishes but what is the current average in CT right now for a BASIC finished home (nothing fancy). Let's say a 180 sqm house? How much per sqm?
Also wondering if you'd say money of a builder builds the shell of the house and you get in contractors to do the finishes 0 BICs, tiles, painting, kitchen, bath etc.
The real artisans, who completed trade school pre 1994 are a dying breed. Not only that, but they're told to complete a house in 3 weeks as opposed to a more realistic 3 months.
No wonder houses & flats are shoddy. Architects specify inferior hollow cement bricks as opposed to clay brick & no more patience to allow concrete, mortar and plaster to set correctly.
I was chasing electrical conduit on a site right next to "bricklayers" laying a completely unplumb brick filler wall. They were steel brickforcing every 5 rows as opposed to every 3 rows of brick.
When i told them the wall is skew,would crack and could fall on someone,they just told me that the plasterers would make it "look straight"... and not to worry about it as I would not be living there !
Unfortunately none of that is ever figured into inflation is it?
Substandard everything and at the same prices or more; chipboard and plastic instead of real wood or metal. Less quantity for the same price; steel brickforcing every 5 rows as opposed to every 3 rows of brick, 330ml instead of 340ml etc.
The question was asked a few weeks back if its double dip or recovery. Interesting leading indicator I was reading today, http://www.consumerindexes.com/index.html, looks like double dip is a few weeks to 2 months away in the US. If it pans the same as '08 it will be as severe and 33% longer. This is of course contingent on the same degree of stimuli in the trillions and 6% employment in the US.
Unfortunately the US is already punch drunk and on the ropes with zero interest rates, 10% unemployment and a sovereign debt wary world.
Its very interesting how the economic landscape has changed since 2008. Investments like emerging markets, commodity currencies and gold were seen as risky but now its the dollar and euros turn. It will be interesting to see if there is another crash whether everyone will barrel into UST's or not.
The Fed has to continue printing, it is the only tool it has left and Bernanke has said he will do whatever it takes. His recent QE announcement strengthened the rand by 10cents or more.
So in a year or 2 we could have a $3000 gold and R3 to $1. This would be a Japanese experience for us, massive deflation. Our economic input and import costs would drastically fall. Export goods would just have to drop in price to stay competitive but since commodities are moving higher to compensate not much adjustment will be necessary.
Of course property will drop like a stone as no one will buy a R6bar house for $2bar. Those who have put money offshore will lose their shirts. Peoples salaries will hugely increase in purchasing power and would have to resist any salary reductions. Those in debt would of course suffer on the other hand.
Meanwhile, back at Bean Counter's secret underground lair...
I don't know if this is significant or nor, but I've just noticed a massive increase in the number of mansions going on the market on the Atlantic Seaboard. In June PrivateProperty.co.za was advertising 6 places for more than R20 million. This month there are 20, including a couple of extreme prices - 70 bar, 40 bar, etc.
Do the rich know something we don't, or is this the recession finally catching up with them?
BC maybe something to do with the value of the Rand? Or the Gold? Maybe the same financial adviser in the Canary Islands who sold them the idea of buying investment property in SA is now telling them to sell and buy Gold instead.
In my opinion, other than a few exceptions, most of the rich are not financially sound or have any more knowledge regarding political or financial stability than the average Joe. Just ask yourself whether it would be possible to sit down with 50 Cent or Britney Spears and discuss negative equity or hedging against a currency. They either entertainers, inherited the money or started a business that happened to take off.
Most of them are children of the wealthy just pissing the money out on a Clifton wall. Either way, the Western SuperWorld is in bad shape. Just wait, with a reshuffle of the world super powers, Clifton will turn into a Chinese Zen garden.
Any takers on my earlier question on average home construction cost right now? I've heard people quote like R6000 per SQM for BASIC quality finished home. That would peg a 200 sqm home at R1.2 million. Throw in some upgrades, pool and landscaping and youre looking at R1.5 million. And vacant land prices are high... I'm guessing that nobody is buying plots right now? Builders must be in bad shape.
Now is the time to invest in property!!! There are lovely developments up for grabs at the moment. First time buyers have many options in and around CT. Invest in the wonderful Upper East Side. A previously derelict factory space is now an upmarket ghetto with sporadic hot water supply and live-in thieves! Or do you feel like living next to a refinery? The beautiful Burgundy Estate offers unparalleled views of holding tanks and gaseous emissions! Close proximity of squatter camps offers endless opportunities to meet the locals during the night! INVEST NOW First Time buyers! It's your last chance!!!
Just been having a look at the new quarterly data out from the SARB. Residential mortgages have turned down again from the spike in March and dropping monthly. They are down more than 50% from their highs in 2007. Refis are still dropping and are now at their lowest point since records began in Jan 2008. Commercial and farms are picking up but are still down as much as 60% from 2007. Mortgage applications for vacant land are still down almost 90% and have turned down again after the pre world cup blip. New building construction and renovations have turned down again after the pre wc blip and are down between 50 and 65% respectively from their highs in 2007.
Thats the hard data available for everyone with an internet connection to see. Since I always check the data it is plain to see the selective financial reporting and cover up in the finmedia. If there is a financial journalist worth reading in SA please let us on this blog know. The laugh here is the ANC doesnt need a tribunal to muzzle the finmedia, they are doing a sterling job all by themselves. We live in the land of the blind it seems. And the financially illiterate.
I have made an investment in a repo stand in a developed upmarket estate in Joburg at 55% less than "dreamers" ask for comparative stands in the same estate - it is one out of 4 stands left in an estate with 300 erven. I plan to owner-build and have a house developed at total cost of 50% of the asking prices of similiar properties in the estate (land price included). I am betting that construction costs will fall over time as developers drop their costs and the price of building materials fall as fewer shopping malls go up and govt struggles to justify expenditure.
I dont think you are dreaming. You got the land cheap and if you owner build, it appears that you can save a lot of money if you have the time to shop around for materials and haggle for labour. I've been doing a lot of reading on the matter and there are examples where people are able to build at 30% less than the market rate. By the way it looks like the cost is in the R6,000 SQM range right now for basic finishes. You are in an upmarket area so plan on around R7,500 SQM (contractor price) less maybe 30% if you owner build - that will leave you around R5000 SQM (not easy I assume but possible). Of course if you get lucky and secure a large load of bricks or cement at a knock off price then you can go cheaper... At the end of the day you will have spent much less compared to other buyers - you could sell and make money or hold tight and make even more. Beats buying resale at stupid inflated prices...
18 comments:
Built twice in this time period. The first was an unmitigated disaster, with the erstwhile hilarious consequence of a wheel being stolen off my wife's car, because a sub-contractor had not been paid by the main contractor.
The second build basically fixed the first, because the latent defects clause and legal framework allows you very little comeback against a builder.
@JDog, what's your outlook on building costs going forward given slowdown in projects?
I've heard so many stories like yours JDog, That's why I intend to build the damn thing myself when the time comes. Bricklaying, plastering tiling and all that isn't so hard. It isn't even hard to do it right. What you're supposedly paying a builder for is to do it right AND fast and that's not so easy if the number of builders out there who fail to do it is anything to go by.
@Anon
My outlook is that just like everything else: it's not getting any cheaper.
The 3 main ingredients: steel, concrete and electricity all have gone through the roof in the last couple of years.
I think that the days of the bakkie builder are numbered. These are the guys suffering the most through the building recession. Their margins are paper-thin now.
So if it is any consolation the guy that did our first build (hell even the poor guy who did the second) are now broke and looking for work.
On building costs - I know the price per square metre varies based on design and finishes but what is the current average in CT right now for a BASIC finished home (nothing fancy). Let's say a 180 sqm house? How much per sqm?
Also wondering if you'd say money of a builder builds the shell of the house and you get in contractors to do the finishes 0 BICs, tiles, painting, kitchen, bath etc.
The real artisans, who completed trade school pre 1994 are a dying breed.
Not only that, but they're told to complete a house in 3 weeks as opposed to a more realistic 3 months.
No wonder houses & flats are shoddy.
Architects specify inferior hollow cement bricks as opposed to clay brick & no more patience to allow concrete, mortar and plaster to set correctly.
I was chasing electrical conduit on a site right next to "bricklayers" laying a completely unplumb brick filler wall.
They were steel brickforcing every 5 rows as opposed to every 3 rows of brick.
When i told them the wall is skew,would crack and could fall on someone,they just told me that the plasterers would make it "look straight"... and not to worry about it as I would not be living there !
I rest my case.
Unfortunately none of that is ever figured into inflation is it?
Substandard everything and at the same prices or more; chipboard and plastic instead of real wood or metal. Less quantity for the same price; steel brickforcing every 5 rows as opposed to every 3 rows of brick, 330ml instead of 340ml etc.
The question was asked a few weeks back if its double dip or recovery. Interesting leading indicator I was reading today,
http://www.consumerindexes.com/index.html,
looks like double dip is a few weeks to 2 months away in the US. If it pans the same as '08 it will be as severe and 33% longer. This is of course contingent on the same degree of stimuli in the trillions and 6% employment in the US.
Unfortunately the US is already punch drunk and on the ropes with zero interest rates, 10% unemployment and a sovereign debt wary world.
This one will be a world changer for sure.
Its very interesting how the economic landscape has changed since 2008. Investments like emerging markets, commodity currencies and gold were seen as risky but now its the dollar and euros turn. It will be interesting to see if there is another crash whether everyone will barrel into UST's or not.
The Fed has to continue printing, it is the only tool it has left and Bernanke has said he will do whatever it takes. His recent QE announcement strengthened the rand by 10cents or more.
So in a year or 2 we could have a $3000 gold and R3 to $1. This would be a Japanese experience for us, massive deflation. Our economic input and import costs would drastically fall. Export goods would just have to drop in price to stay competitive but since commodities are moving higher to compensate not much adjustment will be necessary.
Of course property will drop like a stone as no one will buy a R6bar house for $2bar. Those who have put money offshore will lose their shirts. Peoples salaries will hugely increase in purchasing power and would have to resist any salary reductions. Those in debt would of course suffer on the other hand.
Interesting times we live in.
Meanwhile, back at Bean Counter's secret underground lair...
I don't know if this is significant or nor, but I've just noticed a massive increase in the number of mansions going on the market on the Atlantic Seaboard. In June PrivateProperty.co.za was advertising 6 places for more than R20 million. This month there are 20, including a couple of extreme prices - 70 bar, 40 bar, etc.
Do the rich know something we don't, or is this the recession finally catching up with them?
BC maybe something to do with the value of the Rand? Or the Gold? Maybe the same financial adviser in the Canary Islands who sold them the idea of buying investment property in SA is now telling them to sell and buy Gold instead.
In my opinion, other than a few exceptions, most of the rich are not financially sound or have any more knowledge regarding political or financial stability than the average Joe. Just ask yourself whether it would be possible to sit down with 50 Cent or Britney Spears and discuss negative equity or hedging against a currency. They either entertainers, inherited the money or started a business that happened to take off.
Most of them are children of the wealthy just pissing the money out on a Clifton wall. Either way, the Western SuperWorld is in bad shape. Just wait, with a reshuffle of the world super powers, Clifton will turn into a Chinese Zen garden.
SuckerJack
Any takers on my earlier question on average home construction cost right now? I've heard people quote like R6000 per SQM for BASIC quality finished home. That would peg a 200 sqm home at R1.2 million. Throw in some upgrades, pool and landscaping and youre looking at R1.5 million. And vacant land prices are high... I'm guessing that nobody is buying plots right now? Builders must be in bad shape.
Now is the time to invest in property!!! There are lovely developments up for grabs at the moment. First time buyers have many options in and around CT. Invest in the wonderful Upper East Side. A previously derelict factory space is now an upmarket ghetto with sporadic hot water supply and live-in thieves!
Or do you feel like living next to a refinery? The beautiful Burgundy Estate offers unparalleled views of holding tanks and gaseous emissions! Close proximity of squatter camps offers endless opportunities to meet the locals during the night! INVEST NOW First Time buyers! It's your last chance!!!
sorry, got lost in the discourse.
If you think you can build even basic finishes for R6k per sq m - sorry to burst your bubble.
MINIMUM building costs for a bricks and mortar house with even sheet roofing is R10k per sq.m
Upscale finished can take you up to R15k per sq.m and beyond if you start importing finishes.
Whaaaaaat? R10,000 per sqm? For basic finishes? Holy cow!!!!!! Suddenly those overpriced used homes look cheap then. LOL.
@Jules, here are some useful links. These demonstrate that you can develop a house at R4000/sqm (R6000/sqm is definately adequate).
http://www.allaboutbuilding.co.za/index.php?option=com_content&task=view&id=261&Itemid=1
http://www.allaboutbuilding.co.za/index.php?option=com_content&task=view&id=281&Itemid=1
http://www.allaboutbuilding.co.za/index.php?option=com_content&task=view&id=297&Itemid=1
Just been having a look at the new quarterly data out from the SARB. Residential mortgages have turned down again from the spike in March and dropping monthly. They are down more than 50% from their highs in 2007. Refis are still dropping and are now at their lowest point since records began in Jan 2008. Commercial and farms are picking up but are still down as much as 60% from 2007. Mortgage applications for vacant land are still down almost 90% and have turned down again after the pre world cup blip. New building construction and renovations have turned down again after the pre wc blip and are down between 50 and 65% respectively from their highs in 2007.
Thats the hard data available for everyone with an internet connection to see. Since I always check the data it is plain to see the selective financial reporting and cover up in the finmedia. If there is a financial journalist worth reading in SA please let us on this blog know. The laugh here is the ANC doesnt need a tribunal to muzzle the finmedia, they are doing a sterling job all by themselves. We live in the land of the blind it seems. And the financially illiterate.
I have made an investment in a repo stand in a developed upmarket estate in Joburg at 55% less than "dreamers" ask for comparative stands in the same estate - it is one out of 4 stands left in an estate with 300 erven. I plan to owner-build and have a house developed at total cost of 50% of the asking prices of similiar properties in the estate (land price included). I am betting that construction costs will fall over time as developers drop their costs and the price of building materials fall as fewer shopping malls go up and govt struggles to justify expenditure.
Am I a dreamer?
I dont think you are dreaming. You got the land cheap and if you owner build, it appears that you can save a lot of money if you have the time to shop around for materials and haggle for labour. I've been doing a lot of reading on the matter and there are examples where people are able to build at 30% less than the market rate. By the way it looks like the cost is in the R6,000 SQM range right now for basic finishes. You are in an upmarket area so plan on around R7,500 SQM (contractor price) less maybe 30% if you owner build - that will leave you around R5000 SQM (not easy I assume but possible). Of course if you get lucky and secure a large load of bricks or cement at a knock off price then you can go cheaper... At the end of the day you will have spent much less compared to other buyers - you could sell and make money or hold tight and make even more. Beats buying resale at stupid inflated prices...
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