2025 in Review: What We Keep Getting Wrong in Residential Construction

The year 2025 was supposed to be a period of recalibration for residential construction, allowing the industry to recover from the overheated market dynamics of the preceding years. Instead, we have stumbled into a frustrating and costly paradox: there is demonstrably less work on the market, yet industry professionals feel more stretched and overwhelmed than ever.

This is not a sign of efficiency, it is a sign of insecurity. In chasing dwindling projects and aggressively cutting fees, many design consultants, from architects to structural engineers and quantity surveyors, are overcommitting and, inevitably, underdelivering. This behaviour is quietly and systematically eroding project quality, blowing out timelines, and fracturing the foundational trust between professionals and their clients. What appears to be cost-saving efficiency on a fee proposal is rapidly turning into a false economy in practice.

CHRONIC OVERLOAD AMIDST DWINDLING PROJECTS

The data confirms 2025 has not delivered a market boom for new residential development. Activity is suppressed, and lead times for securing new projects are lengthy. Despite this reality, a prevailing complaint across the consulting sector is one of being chronically overloaded. Architects, engineers, and QSs are reporting their firms are at, or above, capacity.

For example, consultants are driven by the anxious need to fill the pipeline, leading them to chase every available project. The unfortunate result is that few firms genuinely have the capacity, or more importantly, the necessary "thinking time" to confidently deliver their current workload.

FEE PRESSURE AND FEAR-DRIVEN OVERCOMMITMENT

The root cause of this overload lies in intense fee pressure. To win a project in a competitive, slower market, many consultants are dramatically cutting their fees. Once the project is won at a low margin, the firm must immediately take on significantly more work just to maintain its pipeline revenue targets.

This under-pricing inevitably leads to overextension. A high volume of live projects means quality assurance is skipped, detailed design work is rushed, and the service becomes fundamentally reactive. Instead of proactive design input and detailed coordination, the consultant finds themselves constantly responding to emerging issues. The immediate casualties are clear: corners are cut, designs are often incomplete upon submission, and the crucial stage of detailed coordination is postponed. The consultant is no longer leading the project; they are scrambling to keep up.

PHASED APPOINTMENTS AND FRAGMENTED DESIGN

Adding to the complexity is the industry trend toward fragmented, phased appointments. Instead of engaging a full design team from concept through to completion, clients are increasingly appointing consultants for limited initial phases, perhaps concept design only, or just up to the tender stage, with a commitment to "see how it goes."

While this approach might seem like sensible client risk management, it actively breaks continuity and weakens accountability. When a consultant’s appointment ends prematurely, key design decisions are deferred or left unresolved. When the project eventually restarts or moves to the next phase with a potentially different consultant, the new team must spend costly time catching up, understanding deferred decisions, and dealing with drawings and responsibilities that no longer align. This lack of continuity introduces systemic risk and almost guarantees that problems will only surface much later.

INCOMPLETE INFORMATION AND THE "DESIGN AS YOU GO" TREND

The fragmentation of design appointments is mirrored in construction procurement. It is common to see construction contracts, and particularly subcontracts, let out in phases (Phase 1, 2, and often 3). This phased release of information, coupled with rushed upfront design work, means that an alarming number of projects now proceed to tender, or even to site, with unresolved design packages.

The construction site quickly transforms from a controlled assembly process into a live problem-solving exercise. Contractors are left to coordinate incomplete details, manage conflicting information, and resolve issues that should have been locked down months earlier by the design team. This "design as you go" approach sacrifices predictability for perceived agility. It is a dangerous tactic that consistently hides major coordination risks, introduces costly variations, and ensures significant cost creep down the line.

THE HIDDEN COST OF FALSE ECONOMIES

Clients initiate these processes with the belief they are saving money by aggressively limiting professional fees and fragmenting appointments. In reality, they are funding a hidden tax that will be paid multiple times over later in the project lifecycle.

The savings made on professional fees are quickly wiped out by the costs of managing the downstream disruption:

• Redesigns and variations: Issues missed during the rushed design phase emerge on site, necessitating expensive variations.

  
  

• Site delays: Lack of coordinated information stops work, leading to daily delay costs.

  
  

• Professional disputes: Disagreements over responsibility for poor information escalate, leading to mediation or litigation.

The core value offered by professional design, predictability, coordination, and risk mitigation, is eroded by the very fee cuts intended to save money. The lack of continuity in planning and documentation does not save costs, it only shifts and magnifies them. This systemic inefficiency benefits no one, causing projects to suffer from stop-go momentum, where funding pauses, redesigns stall progress, and overall risk steadily increases.

A BRIGHTER NOTE: CONTRACTORS ARE DELIVERING BETTER

It is important to acknowledge one significant positive trend: with the market no longer severely overheated, good contractors are now operating with greater time and focus. They are no longer forced into rushed starts or burdened by the scarcity of skilled labour.

When provided with a clear, complete, and coordinated set of design information, high-quality contractors are delivering cleaner, faster, and more efficient builds, often with fewer disputes.

The design side must learn from the contracting side’s current ability to execute effectively when the inputs are clear.

WHAT NEEDS TO CHANGE

To break this false economy cycle, a fundamental shift in perspective is required from both consultants and clients.

Consultants must recalibrate their practice. They must prioritise signing and delivering fewer, better-executed projects over the relentless, unprofitable volume chase. A realistic fee that allows for dedicated ‘thinking time’ and proper coordination is a fee that protects the consultant’s reputation and the client’s long-term interests.

Clients must transition from viewing professional fees as a cost to be minimised to an investment that protects project value. Sustainable fees safeguard quality, reduce costly variations, and ensure a smooth delivery path.

The entire industry must commit to rebuilding continuity across all project stages. Restoring full-stage appointments is the easiest way to reintroduce true accountability and ensure design quality is locked down well before the contractor breaks ground. Otherwise, the "cheap" projects won and rushed through in 2025 will inevitably become the "costly lessons" of 2026.

https://www.multiproject.org/