South Australian government researching how to lower apartment construction costs

An apartment development project in South Australia’s Woodville West has the state government partnering with the private sector as they explore how to lower construction costs.

The project is a 1,500 square metre block, allocated by Renewal SA, for a four or five storey apartment building comprising of 16 to 20 dwellings at Woodville West's The Square with aims to bring the price for the home buyer down to $200,000s to low-$300,000s per apartment on completion.

This is under a project called the Apartment Construction Cost Demonstration, part of looking at increasing affordability. The results of the project will be a commercially-replicable development model that can be sold at fair price points in inner and middle ring metropolitan locations. They look to achieve the construction at a target cost per square metre that will reduce overall costs. This cost should be $1,800 to $2,000 per square metre. They will then share these learnings with the industry, including techniques and practices around building layout, construction methodology and material choice.

Minister for Housing and Urban Development John Rau said the main focus is to reduce the costs for a home buyer.

“Finding a solution to the current high construction cost of apartments will help bring down the purchase costs, meaning more South Australians will be able to afford houses in areas of their choice,” said Rau.

“Creating more quality, affordable housing along Adelaide’s key transport corridors – particularly medium-density dwellings such as apartments - is an important goal for South Australia’s property sector,” he said.

A first of its kind in the state, it has been sourcing advice through an Industry Reference Group – made up of real estate industry experts including builders and architects.

“The key to the success of this project will be innovation and collaboration between the builder, design team, Renewal SA and industry, who will need to explore elements including building and site layout, construction methodology and choice of material," he explained.

Members from the industry involved also include the Housing Industry Association, the Urban Development Industry Association, the Property Council, Master Builders Association, the Australian Institute of Architects, the Planning Institute of Australia and the Australian Institute of Building Surveyors.

“Innovations that achieve lower apartment construction costs will be shared with the building industry so that the greatest number of people can benefit,” he said.

The UDIA (SA), who are on the panel, have welcomed the project. Executive director Terry Walsh said that the project has the potential to make a significant difference to the cost of property.

“The UDIA, which is represented on the project’s Industry Reference Group, is keen to explore not only improvements in building techniques, processes and materials but also ways of streamlining approval and regulatory processes. We hope that lessons learned from this project will help reduce time and costs associated with not only apartment construction but all forms of housing construction," said Walsh.

Currently, an expression of interest process is open to find a builder partner that will be part of the panel selecting the design team.

Construction for the apartment project is anticipated for the first half of 2015.