2022 construction costs

[fanmily 0]

Hi! Anyone did a recent sourcing and contracting to reconstruct or rebuild? I would like to gain insights to the latest pricing. I’m going for tender in a few months. Thanks all in advance. 

[snoozee 98]

I don't have the numbers but I would say expect to pay at least 20 percent more now compared to 2019/2020 prices.

Meaning if 2019/2020 the PSF is about $350, you are looking at a PSF cost of about $420 today.

below is the tender price index from BCA which basically shows that there is a 20 percent increase in 4th quarter 2021 prices against prices in 2019/2020. 

 

see the below tables on how raw material prices has increased from 2020 till today. Cement price has increased by about 20 percent, concrete price by about 10 percent and steel rebars pricing by almost 70 percent.

If you look at the text in red, BCA is expecting further higher raw material prices due to the fact that we are importing in all the raw materials and oil prices (needed for transport) has increased due to the war

 

[MrSleepy 0]

On 5/5/2022 at 4:29 PM, fanmily said:

Hi! Anyone did a recent sourcing and contracting to reconstruct or rebuild? I would like to gain insights to the latest pricing. I’m going for tender in a few months. Thanks all in advance. 

I would be interested to know if you managed to get an estimate. Also looking to buy and rebuild but hesitant as I’m unsure of what total cost is today (seems like prices has gone up significantly?) 

also any recommendations on archi or builder would be appreciated. Not sure where to start sourcing, feeling like a small fish in big ocean. 

[snoozee 98]

51 minutes ago, MrSleepy said:

I would be interested to know if you managed to get an estimate. Also looking to buy and rebuild but hesitant as I’m unsure of what total cost is today (seems like prices has gone up significantly?) 

also any recommendations on archi or builder would be appreciated. Not sure where to start sourcing, feeling like a small fish in big ocean. 

unless budget is not a concern, I would highly suggest you to work out your sums first.

mortgage interest rate is increasing due to Feds increasing their rate by 0.5% just last week. buying a house will mean a 25% up front payment in cash/cpf with at least 5% mandatory in cash as LTV ratio is at 75% now. so for a 2.3M house (cheapest freehold inter terrace currently listed on the market based on property sites), this will mean you need to fork out 575K up front with minimum 115K in cash. The stamp duty for a 2.3M house is currently at 76.6K which can be paid via cash and/or CPF. if you have additional properties in your name now, do note the LTV ration will decrease and you also need to pay ABSD as well.

Assuming you need to spend 1.2M to rebuild the entire house, banks can only loan you up to 75% of the construction cost. This means you will need to have 300K in cash to pay your contractor/consultants before the bank loan drawdowns can take place. Also bridging loan for construction usually is at a higher interest as well of about 5% until you receive TOP/CSC which is when the construction loan can be converted to a loan similar to the mortgage loan rates. 

So basically if you are planning to buy and rebuilt now, you are looking to need at least 300K + 115K = 415K in cash with another 536.6K in CPF/cash which is close to 1M in total.

once you've worked out that finances is no issue, then you can start sourcing for your ideal piece of land in your preferred location. Ideally you should buy an old single storey house in its original condition if you have the intention to rebuilt as the pricing should be slightly cheaper than an existing 2 storey house. only at the stage when you have short listed your target land/property then should you get an architect/builder in to seek opinions on the rebuilt potential and cost.

[MrSleepy 0]

10 hours ago, snoozee said:

unless budget is not a concern, I would highly suggest you to work out your sums first.

mortgage interest rate is increasing due to Feds increasing their rate by 0.5% just last week. buying a house will mean a 25% up front payment in cash/cpf with at least 5% mandatory in cash as LTV ratio is at 75% now. so for a 2.3M house (cheapest freehold inter terrace currently listed on the market based on property sites), this will mean you need to fork out 575K up front with minimum 115K in cash. The stamp duty for a 2.3M house is currently at 76.6K which can be paid via cash and/or CPF. if you have additional properties in your name now, do note the LTV ration will decrease and you also need to pay ABSD as well.

Assuming you need to spend 1.2M to rebuild the entire house, banks can only loan you up to 75% of the construction cost. This means you will need to have 300K in cash to pay your contractor/consultants before the bank loan drawdowns can take place. Also bridging loan for construction usually is at a higher interest as well of about 5% until you receive TOP/CSC which is when the construction loan can be converted to a loan similar to the mortgage loan rates. 

So basically if you are planning to buy and rebuilt now, you are looking to need at least 300K + 115K = 415K in cash with another 536.6K in CPF/cash which is close to 1M in total.

once you've worked out that finances is no issue, then you can start sourcing for your ideal piece of land in your preferred location. Ideally you should buy an old single storey house in its original condition if you have the intention to rebuilt as the pricing should be slightly cheaper than an existing 2 storey house. only at the stage when you have short listed your target land/property then should you get an architect/builder in to seek opinions on the rebuilt potential and cost.

Hey Snoozee thanks for the reply very insightful indeed. So I think the issue I’m having is trying to budget the rebuild cost in todays inflated market. Is 1.2M really sufficient? Does this include ID, materials and getting the various permits? The budgeting for land purchase is rather clear as you pointed out but how do I get a rebuild estimate? Will the archi or builder entertain me? Im likely looking to rebuild a inter terrace maybe 2.5 storey, land about 1800. 

Edited May 12, 2022 by MrSleepy

[snoozee 98]

8 hours ago, MrSleepy said:

Hey Snoozee thanks for the reply very insightful indeed. So I think the issue I’m having is trying to budget the rebuild cost in todays inflated market. Is 1.2M really sufficient? Does this include ID, materials and getting the various permits? The budgeting for land purchase is rather clear as you pointed out but how do I get a rebuild estimate? Will the archi or builder entertain me? Im likely looking to rebuild a inter terrace maybe 2.5 storey, land about 1800. 

1.2M is based on 20 percent increase in construction cost from 2020 and today where it is likely that an inter terrace would cost 1M to rebuild in 2019/2020.

an architect or builder would also likely give you an estimate based on the constructed floor area of the new house multiple by a PSF rate.

assuming your 1800sqf land is having the dimensions of 20ft x 90ft, this will give you a metric dimensions of about 6m x 27.4m

your max GFA may be something like this excluding the 9.5m for front (7.5m) and rear (2m) setback as well as the 7m (3.5m x 2) setback for the attic

1st storey = 6m x 17.9m = 109.3sqm = 1176.6sqf
2nd storey = 6m x 17.9m = 109.3sqm = 1176.6sqf
Attic storey = 6m x 10.9m = 66.6sqm = 717.3sqf

total GFA = 285.27sqm = 3070.6sqf

So what needs to be done next is to plug in the PSF rate multiply by the total GFA and you can get the estimated cost. Whether you going the architect route or design and build contractor route will end up having the same estimated cost is a question mark. You might end up with the same cost for both or one higher than the other.

While going with the builder router may seem cheaper or more convenient, do note that you will also need to choose the builder properly since your builder will also end up being your project manager as opposed to having an architect (whom you hire) to protect your interests. Also since builder's may give a quotation which excludes certain items so you may end up having with many VOs to top up the cost. Do note that for VOs, normally you will need to pay in cash since the construction loan will only cover what was the original quoted/approved amount.

During construction, there will be times when certain things happen or there is a change of mind which results in VOs. So even if you have an architect to draw up the specifications, you are still likely to have a couple of VOs at the end of the day but the main idea of having an architect to draw up the specifications for tender is to reduce or eliminate these changes and allow a proper comparison of costs from various builders.

Again estimated cost is like what the words mean is just an estimate but it lets you have an idea of what to budget for.

[MrSleepy 0]

6 hours ago, snoozee said:

1.2M is based on 20 percent increase in construction cost from 2020 and today where it is likely that an inter terrace would cost 1M to rebuild in 2019/2020.

an architect or builder would also likely give you an estimate based on the constructed floor area of the new house multiple by a PSF rate.

assuming your 1800sqf land is having the dimensions of 20ft x 90ft, this will give you a metric dimensions of about 6m x 27.4m

your max GFA may be something like this excluding the 9.5m for front (7.5m) and rear (2m) setback as well as the 7m (3.5m x 2) setback for the attic

1st storey = 6m x 17.9m = 109.3sqm = 1176.6sqf
2nd storey = 6m x 17.9m = 109.3sqm = 1176.6sqf
Attic storey = 6m x 10.9m = 66.6sqm = 717.3sqf

total GFA = 285.27sqm = 3070.6sqf

So what needs to be done next is to plug in the PSF rate multiply by the total GFA and you can get the estimated cost. Whether you going the architect route or design and build contractor route will end up having the same estimated cost is a question mark. You might end up with the same cost for both or one higher than the other.

While going with the builder router may seem cheaper or more convenient, do note that you will also need to choose the builder properly since your builder will also end up being your project manager as opposed to having an architect (whom you hire) to protect your interests. Also since builder's may give a quotation which excludes certain items so you may end up having with many VOs to top up the cost. Do note that for VOs, normally you will need to pay in cash since the construction loan will only cover what was the original quoted/approved amount.

During construction, there will be times when certain things happen or there is a change of mind which results in VOs. So even if you have an architect to draw up the specifications, you are still likely to have a couple of VOs at the end of the day but the main idea of having an architect to draw up the specifications for tender is to reduce or eliminate these changes and allow a proper comparison of costs from various builders.

Again estimated cost is like what the words mean is just an estimate but it lets you have an idea of what to budget for.

so assuming 400psf x 3100sqft = 1.24m should be sufficient as a budget. usually this would include all material cost (flooring, cabinetries, etc)? personally, do you recommend the archi path or design and build and any good names to recommend since I assume you have been done this path?

is the repayment on the construction loan (before top) also similar to a housing loan? eg. mthly repayment = interest (5% eg.) + principal over 25 yrs? 

thanks vm for taking the time to reply. it's been helpful! 

 

Edited May 13, 2022 by MrSleepy

[snoozee 98]

2 hours ago, MrSleepy said:

so assuming 400psf x 3100sqft = 1.24m should be sufficient as a budget. usually this would include all material cost (flooring, cabinetries, etc)? personally, do you recommend the archi path or design and build and any good names to recommend since I assume you have been done this path?

is the repayment on the construction loan (before top) also similar to a housing loan? eg. mthly repayment = interest (5% eg.) + principal over 25 yrs? 

thanks vm for taking the time to reply. it's been helpful! 

 

that is assuming the current pricing is still at $400psf which I believe should be higher due to increase in cost of raw materials as well as manpower costs. The tender amount would normally include floor finishing, electrical fittings and sanitary fittings. Carpentry work will depend on whether your architect is providing the detailed specifications and drawings as part of the tender specifications or not. Some owners would hire another ID to work on the interior finishing like carpentry so this would be excluded from the builder's tender.

The architect route would be better since you have someone to project manage and look after your interests as opposed to just you against the builder when issues crop up and decisions need to be made.

for the construction loan repayment before TOP/CSC, it is based on the amount drawn down till date. Say for example your total construction cost is 1M and the bank is loaning you 750K, you will need to pay the first 250K in cash to the builder yourself first once the contractor's monthly progress claims come in and get approved by the architect. The architect will then issue an interim payment certificate so that you as the employer can issue payment to the contractor.

Once the "tipping point" of 250K is passed, then the bank will come in and pay the contractor based on the progress claims and interim payment certificates.

So for example the contractor issues another progress claim amount of 60K after the first 250K, this 60K will be approved and verified by the architect and then the bank's lawyers. Once the bank approves of the payment of 60K, the contractor will be paid payment of 60K. Once the contractor is paid, you will start paying the principal (60K) and interest associated with this 60K on a monthly basis.

When the contractor next issues another progress claim for say 80K in the next month, the same verification process will be done. Once the bank disburses the 80K to the contractor, you will technically owe the bank 60K + 80K which is 140K. but during the month, you would have paid part of the 60K and interests already so the total amount owed will be less than 140K. So for the next month, you will be repaying an amount which is slightly more than what was paid last month since you will have a higher principal sum and interest to be paid. The thing is the repayment amounts will only be calculated based on what has been disbursed and repaid principal thus far (over the total loan years and interest) and not based on the actual loan amount (eg: 750K).

So your repayment amounts will increase slowly until the full disbursement is done. But full disbursement normally will not be done as banks will keep a small percentage as retention sum until the DLP is over. Even though the banks may withhold this retention sum till DLP is over, you will be doing the repayments based on the full loan amount once the bank converts your bridging loan to a normal mortgage loan. This conversion is usually done upon TOP or CSC depending on the bank. If the bank only allows for conversion after CSC, then you will still be paying the high interest rate until CSC is obtained because CSC is usually obtained months after TOP.

Do also note that if you are intending to take a construction loan, you need to be aware that not all banks in SG offer. So it is best that you check out which banks offer a mortgage and construction loan else you may be stuck with a problem as the bank you borrow $$$ from to buy the house may not loan you $$$ for construction.

[MrSleepy 0]

22 hours ago, snoozee said:

that is assuming the current pricing is still at $400psf which I believe should be higher due to increase in cost of raw materials as well as manpower costs. The tender amount would normally include floor finishing, electrical fittings and sanitary fittings. Carpentry work will depend on whether your architect is providing the detailed specifications and drawings as part of the tender specifications or not. Some owners would hire another ID to work on the interior finishing like carpentry so this would be excluded from the builder's tender.

The architect route would be better since you have someone to project manage and look after your interests as opposed to just you against the builder when issues crop up and decisions need to be made.

for the construction loan repayment before TOP/CSC, it is based on the amount drawn down till date. Say for example your total construction cost is 1M and the bank is loaning you 750K, you will need to pay the first 250K in cash to the builder yourself first once the contractor's monthly progress claims come in and get approved by the architect. The architect will then issue an interim payment certificate so that you as the employer can issue payment to the contractor.

Once the "tipping point" of 250K is passed, then the bank will come in and pay the contractor based on the progress claims and interim payment certificates.

So for example the contractor issues another progress claim amount of 60K after the first 250K, this 60K will be approved and verified by the architect and then the bank's lawyers. Once the bank approves of the payment of 60K, the contractor will be paid payment of 60K. Once the contractor is paid, you will start paying the principal (60K) and interest associated with this 60K on a monthly basis.

When the contractor next issues another progress claim for say 80K in the next month, the same verification process will be done. Once the bank disburses the 80K to the contractor, you will technically owe the bank 60K + 80K which is 140K. but during the month, you would have paid part of the 60K and interests already so the total amount owed will be less than 140K. So for the next month, you will be repaying an amount which is slightly more than what was paid last month since you will have a higher principal sum and interest to be paid. The thing is the repayment amounts will only be calculated based on what has been disbursed and repaid principal thus far (over the total loan years and interest) and not based on the actual loan amount (eg: 750K).

So your repayment amounts will increase slowly until the full disbursement is done. But full disbursement normally will not be done as banks will keep a small percentage as retention sum until the DLP is over. Even though the banks may withhold this retention sum till DLP is over, you will be doing the repayments based on the full loan amount once the bank converts your bridging loan to a normal mortgage loan. This conversion is usually done upon TOP or CSC depending on the bank. If the bank only allows for conversion after CSC, then you will still be paying the high interest rate until CSC is obtained because CSC is usually obtained months after TOP.

Do also note that if you are intending to take a construction loan, you need to be aware that not all banks in SG offer. So it is best that you check out which banks offer a mortgage and construction loan else you may be stuck with a problem as the bank you borrow $$$ from to buy the house may not loan you $$$ for construction.

Tks clear explanation on the construction loan. Ok so maybe 420psf might be a better gauge. And typically it takes 2 years to complete a rebuild (from what I read in the other threads but not sure how updated are those) ? Oh yea and in your view, do you expect construction cost to normalise back to lower psf or do you reckon this is the new norm and can only go up from here? Same for land price? Just like to hear your view  

[snoozee 98]

2 hours ago, MrSleepy said:

Tks clear explanation on the construction loan. Ok so maybe 420psf might be a better gauge. And typically it takes 2 years to complete a rebuild (from what I read in the other threads but not sure how updated are those) ? Oh yea and in your view, do you expect construction cost to normalise back to lower psf or do you reckon this is the new norm and can only go up from here? Same for land price? Just like to hear your view  

For an inter-terrace, the norm is to complete within 12 months to 18 months and get TOP pre-COVID. With normalisation now, this should be the timeline and not 2 years. 
 

I don’t think construction cost will go down in the near future especially the war in Europe is likely to be prolonged. With the war causing oil prices to spike, this caused cost of logistics to increase. 
 

barring a huge recession in SG, we are unlikely to see housing prices coming down. The cooling measures government put in place just stems the rate of increase of housing prices but doesn’t bring the prices down. Also for landed, there just around 80k landed houses in SG so in the long run price for landed house should go up steadily as well as long as you buy a freehold house. 

[drgoku 0]

20 hours ago, MrSleepy said:

Tks clear explanation on the construction loan. Ok so maybe 420psf might be a better gauge. And typically it takes 2 years to complete a rebuild (from what I read in the other threads but not sure how updated are those) ? Oh yea and in your view, do you expect construction cost to normalise back to lower psf or do you reckon this is the new norm and can only go up from here? Same for land price? Just like to hear your view  

Hi

If you manage to get a quote for complete rebuild could you update here the latest psf cost for everyone's benefit. for reference I have aquaintances who were quoted upto 350 psf just before the pandemic. I hope the cost isn't 420 psf now. It wouldn't make it worthwhile for me considering the land cost also exploded.

[Itanium 1]

Do take note of some unplanned costs which may not be known until you take over the land and performed the various checks and tests:

For example, i was hit by a number of additional costs and as a result cut back on my plans to add a lift

1) Soil test results were not good, even though it was in a well-known area where piling is usually not required. In my case, the soil test results were poor and piling costs of $80K added.

2) RC Trench is needed. $35K added.

3) Significant amount of asbestos detected and removal costs of $6.5K.

My land is 2100 sqf, original single storey inter-terrace built in 1960s. Planned to construct to 3 storeys with GFA 4,787.

Building costs are $1.3M (inclusive of the above additional items), and do not include architect fees of $52k, 3rd party submission fees (e.g URA, BCA) $20K. Carpentery, sanitary fittings, air conditioners will be separately charged. 

 

Edited May 15, 2022 by Itanium

[snoozee 98]

13 hours ago, Itanium said:

Do take note of some unplanned costs which may not be known until you take over the land and performed the various checks and tests:

For example, i was hit by a number of additional costs and as a result cut back on my plans to add a lift

1) Soil test results were not good, even though it was in a well-known area where piling is usually not required. In my case, the soil test results were poor and piling costs of $80K added.

2) RC Trench is needed. $35K added.

3) Significant amount of asbestos detected and removal costs of $6.5K.

My land is 2100 sqf, original single storey inter-terrace built in 1960s. Planned to construct to 3 storeys with GFA 4,787.

Building costs are $1.3M (inclusive of the above additional items), and do not include architect fees of $52k, 3rd party submission fees (e.g URA, BCA) $20K. Carpentery, sanitary fittings, air conditioners will be separately charged. 

 

If you planning to stay long term, better put in the lift now if possible rather than later since it’s going to be messy. 
 

35k for RC trench is quite ok. Mine cost almost 100k. Did you purchase the SIP from PUB prior to scoping out the works? Cos the SIP will show where the public sewer is and you will know that a trench will be needed if the sewer is running through your land. 
 

for asbestos, many old houses come with it. I paid more than 20k to get it removed due to quite a substantial amount of asbestos existing in my original house. 
 

if you are completing everything including carpentry and fittings for 1.5M, this will work out to around 320psf which is definitely a good price in today’s market. 

[drgoku 0]

15 hours ago, Itanium said:

Do take note of some unplanned costs which may not be known until you take over the land and performed the various checks and tests:

For example, i was hit by a number of additional costs and as a result cut back on my plans to add a lift

1) Soil test results were not good, even though it was in a well-known area where piling is usually not required. In my case, the soil test results were poor and piling costs of $80K added.

2) RC Trench is needed. $35K added.

3) Significant amount of asbestos detected and removal costs of $6.5K.

My land is 2100 sqf, original single storey inter-terrace built in 1960s. Planned to construct to 3 storeys with GFA 4,787.

Building costs are $1.3M (inclusive of the above additional items), and do not include architect fees of $52k, 3rd party submission fees (e.g URA, BCA) $20K. Carpentery, sanitary fittings, air conditioners will be separately charged. 

 

The prices have indeed gone up a lot. I saw in a video where a builder mentions the before pandemic inter terrace rebuild cost is $1M and a semi d cost is $1.4m. Looks like inter terrace now is at 1.3m++ which would make it a more than 30% increase in just two years.

Edited May 16, 2022 by drgoku

[Itanium 1]

6 hours ago, snoozee said:

If you planning to stay long term, better put in the lift now if possible rather than later since it’s going to be messy. 
 

35k for RC trench is quite ok. Mine cost almost 100k. Did you purchase the SIP from PUB prior to scoping out the works? Cos the SIP will show where the public sewer is and you will know that a trench will be needed if the sewer is running through your land. 
 

for asbestos, many old houses come with it. I paid more than 20k to get it removed due to quite a substantial amount of asbestos existing in my original house. 
 

if you are completing everything including carpentry and fittings for 1.5M, this will work out to around 320psf which is definitely a good price in today’s market. 

Yeah i did purchase the SIP from PUB. The sewer pipe was just within backyard setback line .. so close to avoiding this cost