Building a new home? Check these factors that can lead to cost overruns

When planning and building a new home, it is important to stick to your budget. Overspending can lead to financial problems down the road, and it can also be stressful to try to stay on top of unexpected costs.

Here, we share some of the factors that are often responsible for budget overruns when building a house. 

1. Poor planning 

The planning of your home has to be properly done to avoid frequent overruns of the budget. Frequent changes in the original design can lead to expenses increasing. If you are unhappy about some aspects of the design, make sure to get it changed before the actual construction phase is underway. Making any major alterations to the plan during construction can also delay the construction timeline, further increasing costs. While minor changes to the plan may be necessary, try to stick to the approved design as much as possible.

Another glaring oversight is if you fail to set aside sufficient budget for the home construction. While you may be unaware of the exact expenses involved with each stage of construction, you must consult with reliable contractors. They can help you figure out a realistic estimate of the cost of materials, labour and other aspects. Besides the estimated cost, a well-planned budget also prepares for emergencies and takes such expenses into account.

2. Unforeseen site conditions

If you do not analyse the site of your home for any unforeseen challenges, such as unstable soil or underground utilities, this can result in unexpected costs later on. A thorough analysis should be done to plan ahead for such situations. Alternatively, if you have a budget assigned for contingencies, you can use that money to fund the excess work needed to build around such issues.

3. Construction delays

Extreme weather conditions or lack of communication between contractors and subcontractors can lead to unforeseen delays in the project. When such delays occur frequently, they can cause cost overruns. The best ways to combat such issues are to manage the project properly, create realistic timelines for construction phases and ensure open and transparent lines of communication with all parties involved.

4. Change orders

Change orders are modifications to the original construction contract, often requested by homeowners. While some changes may be necessary, frequent change orders can significantly impact the budget. To avoid cost overruns, you should carefully consider changes and their associated costs before approving them. Having a clear change order process in place can help manage alterations effectively.

5. Material selection and frequent upgrades 

Selecting high-end materials or making numerous upgrades to fixtures and finishes can quickly drive up construction costs. While it’s essential to have a home that meets your preferences and needs, it’s equally important to establish a budget for materials and finishes and stick to it. Prioritise upgrades that truly enhance your lifestyle and resale value while being mindful of the associated costs.

When it comes to material selection, it is important that you make a well-informed decision to keep the cost in check. For instance, you can use our cement calculator to find out exactly how much cement you would require to complete your planned construction and the cost of the cement. Besides the cement cost calculator, we have a modern building materials calculator that gives you a complete breakdown of the material costs, including InstaMix Plastosmart, ZeroM Speedex, ZeroM Poly Rich Wall Putty, ZeroM Watershield, and more. 

Looking for information regarding home construction and planning?

You can explore useful insights on planning and construction stages. You will find information on home-building stages such as: Substructure, Plinth Level, Superstructure, and more.