How Much Does It Cost to Build a House in Australia
By: John Garcia | Date Posted: November 8, 2021
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When you decide to build a new house in Australia, the basic price shown on the builder’s website does not always define how much it costs to build a house in Australia, as every individual project has its price. If you require this service, you should seek ‘turn-key’ products, which can help streamline the cost. In most circumstances, they will ask you to pay for the house in installments. So, ‘How Much Does It Cost to Build a House in Australia’ becomes a crucial question to address.
In general, the average cost to build a new house in Australia ranges between AU$1250 and AU$1700 per square meter. This is for a conventional project house with no high-end finishing or extra construction expenditures.
How Much Does It Cost to Build a House in Australia?
However, suppose you plan on building a house and want to better understand how much money you will need to budget. In that case, you must add the following unaccounted aspects into your financial plan before signing your contract.
We have divided them into four parts: site expenses, pre-start expenses, modifications, and finishing expenses, which we shall describe in-depth after briefly discussing provision amounts and prime prices.
Cost to Build a New House
The cost of a standard double brick house varies depending on the finish you choose and whether you have an off-the-plan property or a custom-designed home. The average cost to build a house in Australia depends on the city and the type of finish you require.
However, be mindful that extra expenses for factors like landscaping, retaining walls, and unusual finishes can significantly increase the overall base price.
Provisional Sums vs. Prime Costs
Before discussing costs, we need to clarify the difference between provisional sums and prime cost elements. These are phrases that appear throughout a project agreement and can cause confusion.
A provisional sum is a tentative cost that the builder estimates regarding how much a certain activity, material, or operation will cost. It is incorporated into the first contract since the builder cannot state a precise cost while providing the contract.
In most circumstances, contractors will utilize provisional figures for site work. For instance, a location may appear quite flat and clean, but while preparing to install the slab, builders may discover a large amount of rock they will have to remove. As a result, they will ask you to pay an extra payment in addition to the initial contract fee.
Prime cost components are those that are liable to change at the outset of the project. They comprise items such as doors, tiles, and faucets. The builder provides an estimated cost to the owner before they sign the contract.
Based on the configuration of the finishes your builder supplies at the outset, these prime cost components may charge you more or save you money if you adjust them during your initial meeting and discussion.
We recommend including some backup money in your finances to accommodate fluctuations in your project agreement’s provisional sum or prime cost items.
Site Costs
Site costs are charges incurred to prepare a plot of land, which raises the cost of building a house. I haven’t discussed house demolition expenses because I’ve not included them in my calculation.
Your builder often performs these in addition to the build price rather than as part of the basic price. You can, however, arrange for a site study before speaking with a builder.
The typical property in Perth costs between AU$14,000 and AU$20,000 to build on. These include a site study, retaining walls, and, if necessary, soil testing.
Pre-Start Session Costs
The pre-start session occurs after your house designs have been finalized, authorized by the council, and when you are confident enough to make crucial decisions regarding the colors, styles, and materials. The Home Building Contracts Act (1991) requires the contractor to include these expenses in the contract.
Even though the builder has already set these prime prices, they are normally the cheapest supplies, furnishings, and equipment in basic contract items, and you may choose to change or modify some of them (you definitely will).
This imposes an additional fee calculated from the difference in the prices of those mentioned items. Most contractors have their own suppliers for items like tiles and fittings. They will normally give you a reference book to read and choose from before attending the concluding pre-start session.
As a general rule of thumb, we recommend adding roughly 5% of the contract fee for pre-start. This depends on whether or not and how much you modify anything listed in the agreement. There could be several issues that might catch you off guard at a pre-start session, such as the costs of roof material, electrical changes, tiling, fittings and fixtures, kitchen materials, etc.
Variation Costs
Variations are revisions to the agreement that you had signed at the beginning or after the pre-start session. For example, you eventually decide to add room to your home. Variation costs should be avoided like the plague.
Builders often charge a 20 percent to 25 percent markup on alterations. In addition, builders often demand a variation fee of around AU$250 for each modification. These costs must be included in your agreement, so be mindful of them before signing.
Variations usually cause arguments which is why we recommend it must be added in writing, outlining the parameters and agreed to by both parties.
Cost of Finishing Your Home
If you haven’t chosen a “turn-key” plan with your contractor, be prepared for potential additional charges to complete your home. You should budget between 10% and 20% of the ultimate housing price to complete the home. Finishing touches include paint, carpet, landscaping, fence, air conditioning, reticulation, pavement, and, if necessary, a driveway.
Choosing the Right Builder for Your Home
Hiring a skilled builder in Australia is essential due to the various types of home construction costs involved. Don’t worry if you haven’t picked a builder yet; we’ve got you covered. Take a look at our Plantation Homes Review, Ausbuild Builder Review, and GJ Gardner Homes to see if they match your criteria to build your dream home.
Thank you for reading!
