Construction cost increase

What it looks like

• QS update, tender, or variation pushes costs above feasibility.
• Contingency is used before construction starts.

Likely causes

• Old rates
• Scope growth
• Design complexity
• Civil/retaining underestimated
• Market price movement

Immediate action

1. 1Pause the affected decision or commitment until the issue is understood.
2. 2Record the issue in the risk register with date, source, owner, and next action.
3. 3Send the relevant documents to Quantity surveyor, Builder, Architect and ask for written advice.
4. 4Update feasibility, programme, budget, and decision register if cost, time, yield, consent, title, finance, or sales assumptions may change.

Step-by-step solution

1. 1Define the problem in one sentence and identify which project decision it affects.
2. 2Check the controlling documents: QS report, Tender comparison, Feasibility, Variation register, and related project records.
3. 3Ask the responsible professional to confirm whether the issue is real, minor, manageable, or project-changing.
4. 4List the available options: redesign, renegotiate, seek consent, add cost allowance, change programme, change sales strategy, or abandon.
5. 5Price and programme each option using the current feasibility model.
6. 6Make a written decision with source references and approval from the developer or project owner.
7. 7Notify affected parties such as lender, lawyer, consultants, builder, agent, buyer, or council when required.

What not to do

• Do not rely on a seller, agent, or builder comment when a planner, lawyer, accountant, engineer, surveyor, valuer, lender, or council needs to confirm it.
• Do not hide the issue from the feasibility just because the project looked profitable yesterday.
• Do not waive due diligence, lodge consent, sign a contract, approve a variation, or promise settlement while the issue is unresolved.
• Do not give legal, tax, finance, planning, engineering, or council advice to others unless a qualified professional has confirmed it.