Building your own house gives you the freedom and flexibility to make your home truly your own.
But how much does it cost to build a house on your own land in Australia? Is it cheaper than buying an established property? What other factors do you have to consider in addition to the cost?
Keep reading to find out!
How Much Does It Cost to Build a House on Your Own Land in Australia?
There is no straightforward answer to this question as the cost of building a house depends on several factors, starting from the size of the home to the condition of the land and the location.
That said, the ABS estimates that the average cost to build a house in Australia is $473,000. On the other hand, the average house size in Australia is 242 square metres, which puts the building cost between $320,000 and $345,000.
Hipages, however, puts the average cost to build a home between $1,300/m2 and $3,900/m2, while other reports indicate that the price of an architecturally designed house can range from $3,000/m2 to $5,382/m2.
It is important to note that all of these are just rough estimations and the actual cost of building your own house could be much higher or lower than the average.
What impacts the cost of building a house on your own land?
You’ll need to consider the following factors when calculating the total cost of building your home.
1. How big is the home?
The number one factor is the size of the home.
The bigger the house, the higher the construction expenses will be since more labour and materials go into building it.
How much does it cost to build a 3-bedroom house in Australia?
The average cost to build a 3-bedroom house comes out to about $1,300/m2 if you use budget materials and are building a weatherboard house on an even block of land. The cost goes up to $1900/m2 for a full brick single-level home that uses high-end construction materials and finishes.
How much does it cost to build a 4-bedroom house in Australia?
The average price to build a 4-bedroom house in Australia is around $1,900 per sqm. On the other hand, a four-bedroom, single-level home project with mid-range finishes costs $2400 per square metre or over $3,900/m2 if you want an architect-designed, full brick, two-level home with high-end materials and high-quality finishes.
How much does it cost to build a 2-story house in Australia or a 5-bedroom home?
The average cost to build a 5-bedroom house is a minimum of $4,300 per square metre. For a second-level extension, expect to pay from $1,850 to $3,300/m2, depending on the quality and cost of construction materials and finishes.
2. Where is the property located?
Costs associated with location and accessibility to the site are another significant factor.
In general, construction projects located in remote areas require contractors and delivery drivers to travel great distances, which makes them more expensive. Most rural areas also do not have a well-established infrastructure (electricity, water, internet connection) which adds more to the overall cost.
On top of that, if the land is on a slope, the terrain will have to evened out before you can start construction. Hipages estimates that outlays on a flat surface start from $12,000, whereas they go up to $25,000 and more on a sloping block.
3. What kind of building materials are you using?
Higher-quality construction materials, such as steel, natural stone, and double-skin brick cost more than budget materials.
Even though it can be tempting to cut down on costs by using low-end materials, the truth is high-end finishes and craftsmanship are more expensive for a reason—they are more durable and safer. Plus, they will increase the value of the home if you decide to sell it down the line. So, don’t cut corners on this aspect and ensure you get high-quality construction materials.
4. Do you have extra features?
Extra features such as reverse-cycle air conditioning, custom fencing or luxury flooring also add to the total bill.
More complex projects naturally cost more and take longer to complete—the more finishes and inclusions you want in the home, the higher the cost. Decide on your priorities, shop around for the best quote and then see which inclusions your budget can handle.
5. What type of project are you considering?
You can choose between volume and custom builders.
Volume builders provide a catalogue of floor plans and designs for you to choose from, while custom builders create unique homes based on the client’s preferences.
Usually the former is cheaper since they have standardised designs and can reduce costs by using familiar materials and tradespeople. They can work faster too since the process is streamlined. However, if you want a custom-made home, it might be worth paying the extra cost and hiring custom builders.
Related Reading: Is building a granny flat worth it?
6. When do you want to move in?
If you want the house to be completed faster, it will likely cost you more. Sometimes though the work can be delayed through no fault of your own—materials could not be supplied in time or weather conditions may not be favourable. It is important to plan and budget ahead for such situations.
How long does it take to build a home in 2022?
One of the most crucial factors to consider when starting with house construction is knowing how long it will take. Once you get the design approved, it will take four to twelve months to finish the construction.
The average time industry experts say it takes to build a high-quality, two-story home is 10 to 12 months.
7. What type of home do you want to build?
The type of construction determines the cost as well. For instance, a semi-detached home costs around $2,022 per m2, whereas the cost of building a duplex can go up to $1.3 million.
The average cost to build a house
So how much does it cost to build a house in Australia?
Here is a look at the cost by city and state.
How much does it cost to build a house per square metre (by major city)
Unsurprisingly, the cost of building a house in Sydney is higher than in the rest of the country, with the price per square metre going up to $5,900.
On the other hand, building in states like WA or SA is more affordable with the cost moving between $314,736 and $638,550. These are also the states where the cheapest properties in Australia are located, so it makes sense that building a home would also be less expensive.
Here is a more detailed look at the building cost per square metre in 2022.
Building costs per m2 in Australia
According to the latest estimations by the ABS, the average cost to build a house by state looks like this:
How has Covid-19 affected the cost of building houses?
Although it can be hard to estimate the full effect of Covid-19 on the construction industry in Australia, we can safely say that the border closures, volatile exchange rates, supply problems and decreased productivity has had a significant impact.
This is how:
1. Rising cost of labour
The cost of labour makes up 35 to 40% of the total cost of building a home. Border closures paused the arrival of international workers, thereby driving demand and increasing the average wage of construction workers.
2. Rising cost of materials
Supply constraints, again due to border closures and restrictions in the supplying countries, have caused the cost of building materials to skyrocket (reinforced steel has gone up by more than 40% in the last year alone).
Australia relies on other countries for the supply of construction materials—for instance, 20% of the country’s structural timber comes from overseas, mainly from Europe. What’s more, the builder would like to make a profit margin of 15 to 20%, which means that the higher cost of materials is also increasing the price of contractors.
3. Cancellation of government schemes
Several of the pandemic-related programs, like the HomeBuilder grant, are now closed for new applications, leaving new homeowners to look for other financing options, such as construction loans or mortgages.
Is it cheaper to buy land and build a house in Australia?
Given the rising prices of property in Australia, it is cheaper to build a new home than to buy, although it might be more complicated. Just for comparison, the average cost of a home in Sydney (as of December 2021) is $1,090,276, while the cost to build a new home in the city is $5,900/sqm.
There are other factors to consider as well—building a home allows you to customise and modify it to your liking. The procedure is complicated as opposed to buying a house which typically involves getting a home loan, finding a property, signing the contract and moving in. There are also a lot of factors that can increase the overall cost and timeframe.
Other costs to consider when building your own home
What other expenses are involved in building a home?
- If you are building on land near bushland you would need bushfire protection or flood insurance if the region is at risk of flooding. You might also want to consider taking out owner-builder insurance to protect your home from water damage, fire or robbery. Insurance can range from $3,000 to $13,000 depending on the insurance company and the level of risk the land is exposed to.
- Demolition costs can also add up if there is an existing structure on the land. The average cost to demolish a house in Australia is around $17k.
- You will also need to pay stamp duty on the property, which can range between states going from $10 to $1,089,000 in NSW and from $350 to $110,000+ in Victoria.
- You will need a professional to design the house. Architects charge 8 to 15% of the building cost so you need to factor this in.
- The plans designed by the architect will have to be submitted to the local council for approval, which also incurs fees (these depend on your council so check with them beforehand).
How to avoid a budget blowout
As you can see, there is a lot involved in building a home. How to keep those costs within budget?
- Talk to a financial expert to set a realistic budget according to your financial circumstances. They can also help you get in touch with a suitable lender for your needs.
- Set your budget at the start—This will stop you from overspending. Plus, if you allocate money for unplanned expenses, you could build your new home within or even under budget.
- Address all issues before construction starts—Drainage, infrastructure and land problems can end up costing more if they come up during construction.
- Do not deviate from the original plan—stick to the original floor plan to avoid added costs.
- Set a deadline for your project to control your spending.
- Consider a prefabricated home—The cheapest home is a flatpack house with prices as low as $1300 per m2 even in highly populated states, like Victoria.
- Go solar—if possible invest a little more in one of the best solar panels and save hundreds and thousands of dollars on energy bills in the future.
How to get the best quotes from builders
It’s imperative that you choose the right builder for your home.
If homeowners were more knowledgeable about what to look for and communications more transparent from the start, there would be fewer issues such as cost blowouts and conflicts.
What to look for in contractor’s quotes:
- Are they licensed?
- What experience do they have?
- Do they have professional indemnity and public liability insurance?
- Do they have references or reviews from past clients?
- Do they charge a fixed fee or a cost-plus contract?
- Can they give you an estimated timeframe?
If you want to get precise quotes from builders, your best bet is to put together a strong ‘tender package’. This contains all the necessary documents, plans and schedules that provide specific instructions to the builder.
Where to find reliable builders?
It’s always a good idea to ask your friends and family or your architect for recommendations. You can also look into professional associations in your area to find expert building services and compare their quotes.
So, what does it cost to build a house on your own land in Australia? It’s essential to remember that many factors contribute to the final price. If you want an accurate estimate of the cost of building your dream home, it’s best to get in touch with a local builder who can give you a quote based on your plans and specifications, and take it from there.
1. What is the cheapest way to build a house in Australia?
There are several ways you can reduce costs when building a home. If you already own land that is suitable for construction, you are halfway there. Next is choosing a reliable, but inexpensive builder and opting for quality, but budget materials. You could also choose low-end finishes and thus significantly lower costs.
2. How much money do you need to build a house in Australia?
There is no correct answer as the cost depends on several factors: how big is the house, where is it located, and what kind of materials do you want to use? In general, you would need over $400,000 to build a home in Australia.
3. How much does it cost to build a 4-bedroom house in Australia?
The cost to build a 4-bedroom house on your own land in Australia varies from $2,400 to $3,900 per square metre, depending on the materials, design and layout.
4. How much does it cost to build a house in Sydney?
Building costs in Sydney are higher than the average cost to build a house on your own land in Australia—they range from $1,960 to $5,900/m2. Even though expensive, it is still cheaper than buying a home which can go up to $1.5 million in the greater Sydney area.