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Why building projects go over budget - and how early planning, clear scope, and the right team can keep things on track!
Did you know around 70% of custom home designs never actually get built?
Yes, it's a pretty staggering number. And it speaks to one of the biggest (and most frustrating) issues in the construction industry: the gap between architectural design and construction budget reality.
When things go off the rails, it’s not just about dollars and cents. It’s months of lost time, emotional stress, and a big blow for homeowners who thought they were on track to create their dream custom home.
A lot of people assume that budget blowouts happen because someone stuffed up or didn’t plan properly. But the truth is more complicated. Construction is a huge, ever-changing beast, filled with moving parts. As one experienced builder once said, “If you know just 1% of this industry, you’re doing well.” It sounds like a joke, but there’s real truth in it.
So, why do budget blowouts happen? Let’s break down the three main culprits that tend to send things spiraling, and more importantly, how to spot them early.
This is the big one. The most common reason projects go over budget? The custom design and construction budget just weren’t aligned from the get-go.
And no, this isn’t about homeowners being unrealistic. It’s usually just a breakdown in communication early on.
When budgets aren’t clear from the start, your design and build team are flying blind. Architectural designers might create amazing architectural spaces without knowing the construction budget, and then builders are left breaking the bad news later that your beautiful, custom home design is way over budget.
The fix sounds simple: be upfront about your budget. But a lot of people hesitate, maybe they’re worried it’ll limit creativity, or that builders will spend every cent just because it’s there. The reality? Good professionals need that number to help you get the most from your new custom home. No one wants to design something you’ll fall in love with, only to find out it’s not going to get built.
This misalignment usually ends in one of three frustrating scenarios:
None of these feels good, and of course number 3 is heartbreaking!
The next trap? Leaving material selections and scope decisions too late in the game.
Materials aren’t just about style they impact everything from structural work to timelines and long-term maintenance. And when you’re renovating or extending, it’s even more important to be crystal clear on what’s included early on, or you’ll end up with expensive surprises mid-way through.
Here’s the kicker: the later decisions get made, the more expensive your custom new home is likely to be.
Say you pick custom joinery instead of standard cabinetry late in the game. That might mean more time, more trades involved, redesigning drawings, even tweaking permits. All of that adds up to time and money.
And then there’s scope creep - the classic “while we’re at it, let’s also…” syndrome. Those little add-ons might seem harmless, but together? They can quietly tack tens of thousands onto your construction budget.
The most underestimated cost trap? Complexity.
Complex details don’t just add a bit of cost, they multiply it!
Take something like floating stairs that meet a perfectly plastered wall. Looks simple and beautiful in a render, right? But in real life, it involves specialist trades, custom fabrication, perfectly timed sequencing, and a whole heap of construction project management.
Same goes for curved walls, flush thresholds, and unique window details. All stunning architectural details, but all can be costly unless they are clearly documented early in the design process.
The real danger? Complexity tends to sneak in bit by bit. A cool feature here, a special material there. No one notices at first. But by the time you’re into documentation or building, it’s too late to backpedal without big costs.
The problem is, a lot of this stuff isn’t obvious to homeowners. Something like “floating stair detail” might sound like a single item, but it actually represents weeks of specialist work and coordination behind the scenes.
These three issues, design misalignment, late decisions, and creeping complexity don’t usually show up alone. More often, they pile on top of each other.
A fuzzy budget leads to scope creep. Scope creep leads to redesign. Redesign invites complexity. Before you know it, the whole thing is snowballing.
And honestly? Most people don’t stand a chance of navigating this on their own. The most successful projects we see are the ones where the builder is brought in early, working alongside the design team to give real-world input on what’s buildable, what’s affordable, and where the risks are.
It comes down to the right team, working together, from the start.
Be clear about your budget early. Work with a Design & Build team or engage a builder early under an Early Contractor Involvement (ECI) agreement to work collaboratively with your design team.
Make material and scope of work decisions sooner rather than later. And if something sounds custom or complicated, ask your builder what it actually means in time and money.
Building a new custom home or renovation is probably the biggest investment you’ll ever make, it deserves solid planning from a team that gets both the creative and the practical sides of construction.
You don’t have to strip away creativity or simplify everything to avoid a budget blowout. But you do need to understand what your decisions mean, and make sure every dollar is going towards something that matters to you.
With the right setup, clear communication, and a bit of upfront honesty, that 70% failure rate of custom home designs doesn’t have to include your project.
If you’d like to work with a design & build team, get in contact with us today!
