How much does it cost to build a house?

Building a house of your own is exciting. You choose your plans, layout and colours and get to see your dream home grow from the ground up. While there are plenty of costs that you may have already thought about if you’re looking to undertake this venture, there are many costs that can be hidden.

According to the American Bureau of Statistics, almost half (44.9%) of new residential dwellings cost more to build than they were approved for in 2019-2020 with an average increase of $3,941 per dwelling. While this price increase will vary depending on your property type or location, it's important to be prepared for all the costs to build a house that can occur when starting from scratch.

Materials

This is probably one you’ve already thought of. You’re going to have to build your dream home out of something and choice of materials can have a big influence in the overall cost of your home.  Material prices are also impacted by availability and demand.

Labour

Another one you’ve probably thought about. Your builders aren’t going to work for free, so you’re going to have to fork over good money for your labour. 

Soil and contour tests

This is possibly one you haven’t thought about. Before laying down any quotes, a builder is going to want to conduct two separate tests; one on the soil and one on the contour of the land. Naturally, any difficulties that can be seen by building on your soil will incur an extra cost. Similarly, builders will assess the slope of the land. Generally, the more of a slant you have, the more it’s going to cost you. As a rough guide, expect to pay around $5-10k for every 1 metre of fall across your property, depending on how drastic it is, and even more if the fall is sideways across the block.

Site costs

Site costs are probably the most variable cost you’re likely to encounter when building a new house. This is based on things like the soil and slope difficulty, whether the site is difficult to get to, whether you have to remove trees and roots, retaining walls are required and other unexpected elements.

Flooring

Believe it or not, many quotes you receive from your builder may not include the cost of putting down flooring. The theory behind this is that you pay to have a house erected on the slab, and that things like carpet, floorboards or tiles are going to cost you extra.

Driveways

Because it is not strictly part of the building itself, many builders’ quotes will not include the cost of a driveway. The cost of a driveway can vary depending on what your preference is for getting your vehicle from the street to the garage.

Landscaping

Make sure you factor landscaping into your final budget, because your builder is unlikely to do so. It’s not uncommon to see builders including 15 square metres of turfing as part of the finishing touches, but don’t expect an oasis-like set-up if you’re not willing to pay a little bit extra.

Natural disaster considerations

If you’re looking to build in an area that may be more prone to feeling the effects of a natural disaster, it might hit you in the hip pocket. For instance, if you’re planning to build in an area that is prone to flooding, your new place may need to be designed just in case of that 1 in 100 year flood occurring. Similarly, for properties that are surrounded by bushland, or are built in areas that are known bushfire spots, it is possible you’ll need to obtain a Bushfire Attack Level rating. Of course, any assessments and modifications needed come at an additional cost.

Land registration

This one is likely to impact you if you are building on a newly distributed piece of land, and are putting a property on that land, as well as connecting things like plumbing and electricity.

Bins

That’s right! Not even the humble wheelie bin is free. You’ll need to contact your local council to get a set of bins delivered to your property once you’re ready to move in.

Fees for closing roads and disruptions

Are you going to need to close down a section of the road for operational purposes (cranes etc.)? That’ll cost you. Councils and sometimes the state government will bill you for disrupting the status quo on their roads.

Design modifications

Things may go wrong throughout the building process, and modifications may need to be made to the initial design of the house. Unfortunately, making such modifications can cost you cash for all number of reasons; the extra labour and materials, needing to enlist the help of an architect and/or surveyor or in some cases resubmitting plans for council approval etc. Be prepared for these “emergency” instances.

Construction loan fees

During the construction period, your loan will usually be interest-only to reduce the amount of your repayments until the building is finished. However, you may attract some additional building costs on your mortgage such as extra valuations or progress payment (draw-down) fees. Your lending specialist will be able to explain these fees during your home loan appointment. 

So how much does it cost in the end?

How much it’s going to cost you to build a house in the end comes down to your circumstances; where are you building, what’s your budget, how many rooms/floors and the final quality of your build.

If you’re looking to build a new place, or just looking to buy, make sure you check out our home loans and home loan repayments calculator. If you’re looking to renovate your current place, we have plenty of resources available to you as well.