DEMITONResearch / Rework statistics / Average cost to rectify a defect in a new detached house, $3,440, national owner survey
Average cost to rectify a defect in a new detached house, $3,440, national owner survey
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A$3,440 per case (2021 AUD): Average cost to rectify a defect in a new detached house, $3,440, national owner survey (Centre for International Economics (for the Australian Building Codes Board), 2021; Australia; moderate confidence).
What it is. Per defect, total rectification cost to all parties (owner, builder, insurer and others), as estimated by dwelling owners; excludes owners' time and other costs.
Sample. Owners' estimates from a survey of 1,606 residential dwellings in all eight states and territories, Census-weighted, 2,574 defects reported. Of the 1,605 dwellings analysed, 1,231 are detached houses with 1,969 defects reported. The report's total cost per defect, including owners' time and other costs, is $4,366 for detached houses.
What it is not. Owners' own estimates, not invoices, and the cost is the owner side (the buyer's cost of putting a defect right), not the contractor's loss, which depends on warranty and who pays. Houses, not civil works. The average covers every defect owners reported, including some the CIE weights as caused by maintenance or alteration rather than the initial build (1,024 of 1,969 detached-house defects are weighted as initial-build). The text calls the $3,440 a cost per dwelling in one sentence, but Table 2.17 and the total-cost line give it per defect. The report does not state the price year of the estimates; 2021 is the report's date. Workmanship is not separated from design and approval failures in this figure.
Where it came from
- Centre for International Economics (for the Australian Building Codes Board) (2021), Building Confidence Report, A case for interventionSection 2.5 (Table 2.5), Tables 2.8 to 2.10, 2.16 and 2.17 (printed pages 24 to 36), executive summary Table 1 · source record
Considered and set aside
- Love, Matthews & Mahamivanan: Gives a mean non-conformance cost of 0.41% of contract value on infrastructure, but the abstract does not name the country, so it cannot fill an Australian cell.
- Love, Ika, Ahiaga-Dagbui, Locatelli & Sing: Recorded rework of 0.39% of contract value at one Australian contractor, but it is not split by cause and its ledgers undercount quality failures.