Builders’ prices have stopped falling as fast as they did a year or two ago – and deals are hard to come by

HOW times change. Last autumn a reader from Dublin was in need of a painter to do a fairly small job. She got a recommendation from a friend and was quoted €4,619 for a job which, the painter estimated, would take between a week and 10 days. It seemed fairly steep so she searched further and within 48 hours had a second quote for exactly the same work but at a price of €2,229.

She contacted the painter who had provided the initial quote and he immediately agreed to match the lower price. She declined his offer, figuring if he had been prepared to charge her such an inflated price in the first place he was not a man to be trusted.

Another reader sought out a quote from a builder for a significantly bigger renovation job earlier this year and received a quote for €70,000. He said no and the builder immediately came back with a fresh quote of €50,000, claiming that the work would be done to the same quality but slightly different materials would be used. Again this offer was refused.

These are undoubtedly tough times for builders. Contractors are going out of business and the profit margins which they were commanding in the good years – the good years for them at any rate – have fallen from as much as 60 per cent (lobby groups for the industry will dispute this figure) to closer to 10 per cent now.

They are also struggling to get paid for jobs already done as banks are increasingly reluctant to cover the costs of home improvements.

Despite the hard times one bright spot on the horizon for builders is the growing number of people who are seeking to renovate rather than move. According to data from onlinetradesmen.ie, attic conversions are up 34 per cent this year while refurbishments have increased by 23 per cent on 2009 figures.

Despite the increased activity, prices are not falling as fast as they did in 2008 and 2009. Industry sources say the rate of price deflation when it comes to smaller, domestic jobs may have been overstated over the last 18 months largely because the room for builders to manoeuvre on price is much more limited and there is a heavy reliance amongst consumers on word of mouth. Clearly people want the best builder they can afford, not the cheapest cowboy on the market and most are prepared to pay a premium for that peace of mind. If they are going to go with a contractor based on the positive recommendations of others, then the options diminish considerably and the competitive edge is dulled.

Ted Laverty of onlinetrademen.ie says prices have stablised somewhat. “In 2009 they were as low as they could go” he says.

“A lot of contractors have gone out of business and a lot of black market work is putting pressure on prices but people need to ask themselves if they want the cheapest labour and the cheapest materials.”

Lindsey Kerrigan certainly did not find contractors willing to haggle earlier this year. She and her partner got the keys to their Ballinteer, Dublin 16, home in April and it needed to be extensively refurbished.

Virtually no work had been done on it since the 1960s. The couple replaced the oil-fired central heating system with gas – with the aid of a Government grant – had the house rewired, extended and remodelled the downstairs and had much of the house replastered once the layers of wallpaper had been stripped off.

“I have to say I found it very hard and it is something I would be very reluctant to do again. It wasn’t an enjoyable experience at all,” says Lindsey.

Despite the tough times for builders, many were as flaky as ever and co-ordinating them so they arrived when they said they would was, she says, the hardest element of the process. Many failed to show up when they said they would and very few appeared willing to cut any class of deal.

“We thought we would be getting all sorts of bargains and people would be dying for the work but the reality wasn’t like that at all.

“Maybe we made a mistake by hiring the wrong people and if I was to do it again I would consider paying a bit more for more reliable contractors.”

The whole refurbishment cost €30,000 but that includes around €3,000 on furniture – she says the couple would have been lost without Ikea and much of their furniture – a sofa, a bed and a kitchen table – came from there; they were exceptional value for money.

They had a budget of €23,000 for the house but over-spent to the tune of 15 per cent.

“I don’t think that costs are falling as much as people are saying and while we did get little deals and discounts here and there, people didn’t seem willing to drop their prices by too much.”

She says the best value was to be found with workers from Eastern Europe – her Latvian plasterer quoted her a price of 50 per cent less than an Irish plasterer, showed up when he said he would and finished the job on time.