Home Construction Tips

Is it expensive to build your own home?

In Australia today, how much can you expect to spend when building a house?

Without sounding trite, the answer to this could be summed up with that frustrating yet often accurate phrase: how long is a piece of string?

The cost of building a house varies significantly depending on the size of the property, the materials you use, the design of the home and the builder you choose. Costs also vary depending on where you live, with some cities having on average cheaper construction costs than others.

Finding the right home constructions company Melbourne is an important decision. Check out our range of the best home design constructions at Hitch Property Constructions.

How much can you expect to pay?

First up, let’s get one thing clear: the base price that builders advertise on billboards and display on their websites are generally only a starting point, and do not reflect how much your home will actually cost when it’s 100% completed.

This is because these “starting from” prices usually only include the basics.

If you are looking for a full price that includes everything from the carpeting through to the landscaping and driveways as well as the white picket fence at the front, then you need to shop around for what’s known as a “turnkey” package – which means all you need to do at the end is turn the key and step inside.

Home Construction Tips

The cost of building a house varies widely, particularly depending on where in Australia you are planning to build.

And as mentioned, the size of the property and the quality of the finishes will impact the final price, too.

For a very high-end home with custom-designed finishes and tailored design, you can expect to pay much more—anything from $1500-$3000 per square metre and up.

There are a number of different factors that can impact the cost of building a house, including but not limited to:

The cost of the land

The first thing to consider when calculating how much it costs to build a house in Australia is the price of the land for the house to sit on, which varies hugely from state to state.

According to The Urban Development Institute of Australia’s 2020 State of the Land report, Sydney’s median lot price was $459,000, Melbourne’s was $330,000 and Adelaide’s $179,000.

The average cost of land in Sydney was $1209 per sqm, Melbourne $837 per sqm and Adelaide $400 per sqm.

The average cost of building a home

Many factors influence the cost of a building, but in December last year, the Australian average was $1393.55 per sqm, according to the Australian Bureau of Statistics (ABS).

However, this figure doesn’t include design, planning permits, any site works or any cost blow-outs.

According to ABS December 2019 Buildings Approvals data, the average dwelling in Australia spans 229.8sqm, which puts the cost for the build portion at $320,238.

Wolf Architects director Taras Wolf, on the other hand, said the cost of building an architecturally designed house starts at a minimum $3000 per sqm, right up to $5382 per sqm or $50,000 per Australian house square (9.29sqm).

Wolf said it is difficult, if not impossible, to compare the cost of an architecturally-designed home to one built by a “volume builder for as little as $1600 per sqm.”

The higher price of architecturally-designed homes is due to the nature of each one is essentially a one-off prototype, because no two clients, site or requirements are ever truly the same. It’s not necessarily related to materials of quality; it has more to do with time.

While he declined to put an average price on building with a large builder because of the many variables, his company’s designs are “architecturally-inspired to deliver a stunning home at a lower cost.”

The company offers more than 90 flexible floor plans, which clients can tailor.

As a national franchise network, builders encourage clients to select a design from one of three ranges. Check out our extensive range of home designs at Hitch Constructions.

What factors affect the cost of building a house?

Land and location

The land is the first prime factor in the overall cost of the home for the budget and, in the majority of cases, will determine the budget for the house build. The nature of the block – is it flat or sloping, for example – will also affect the total cost. Each state also has its own varied rates for taxes, insurances, and certification processes and fees. Building outside of a metropolitan area will also affect the cost for out-of-area allowances for additional travel.

Size of the property

As a general rule, the bigger the property is, the more it’s going to cost. The expanding size of the property runs parallel to the cost, whether that be the sqm size of the property, or if it’s one or two stories.

Adding a storey to your property will also significantly add to the bill, as it will require extra features such as stairs and scaffolding. A larger property will also directly increase the cost of all the other factors associated with your build, like the materials and tradesmen.

The bigger the house, the more materials you’ll need to build it.

In Australia, building costs are usually calculated by multiplying the total floor area (m2) by the cost estimate ($ per m2) provided by the building contractor.

Height

McCredie says that it will generally cost more to build a two-storey home than a one-storey home as there are additional items required to build a second-storey home, including an additional floor system, stairs, scaffold, fall protection equipment etc. that are not always required for a single-storey house build. The double-storey, four-bedroom homes can start from $290,000, versus an average single-storey, the four-bedroom home starting from $190,000. There’s an average difference of $80,000–$100,000 between one-storey and two-storey houses, but these price ranges will typically not include all turnkey inclusions.

Materials

From brick and brick veneer to a lightweight clad such as a weatherboard, the materials used in the construction of your home will have a big impact on the total cost. The approximate costs of a brick veneer vs a fibre cement sheet clad are going to be about on par. The different range of bricks and also the type of mortar colour will increase the cost of the brick component, and some bricks are approximately three times the cost of your entry-level brick. Lightweight cladding is also in a similar comparison.

The type and quality of materials used to build your property can greatly influence the total price. Different material types won’t mean much to the average Joe, but using a timber frame is typically the cheapest option, brick veneer a median price point and double skin brick the most expensive option.

Furthermore, not all bricks are created equal, with mortar colour and the brick composition all affecting price. Looking internally, whether you have carpet or tiles, and their quality is also a big factor that affects your end bill.

Using higher quality materials will usually be more expensive, but can lessen the chance of requiring maintenance down the line and can also improve the value of the property.

Trades

Unless you’re applying to be on ‘The Block’, chances are you won’t be building your own home – you’ll need professionals to do it for you. Having a good relationship with your builder is important to ensure your build is going smoothly and it’s better to go with someone reliable who is more expensive than someone cheap and dodgy.

Ensure your builder is appropriately qualified, registered, licensed and insured and also ask for their experience in similar projects to yours so you can see the evidence of their work. You’ll also need plumbers, electricians, painters, tilers, plasterers; every single type of tradie.

Trades also play a part in the cost of your build. Brick trades typically have different rates for upper or lower bricks, and also single- and double-height bricks. Lightweight-clad trades generally have a single rate for each cladding type. Then there are the other trades you need to get your house to move-in status: plumbers, electricians, tilers, painters, plasterers, renderers and even landscape gardeners.

Timeframes

Your builder will typically give you an estimated time of completion for your build. In some cases, you can ask for this to be shortened, at the cost of course.

It’s also not uncommon for builds to be delayed, as a result of bad weather or bad builders. This is only going to increase your costs, so make sure you’re prepared for this circumstance if it comes along.

Other factors that can impact the price

Once you have signed a contract with a builder and decided up the layout and design of your property, they will make plans and prepare documents, before arranging a ‘pre start meeting’.

The pre-start meeting is at the stage at which your house plans are finalised.

The council approves them, and you are ready to make your final choices in regards to all of the design aspects, such as wall colours, the types of light fittings and the materials used on the roof and floors.

The ‘prime costs’ are generally already in place by the builder, however, keep in mind that in base contract packages, the prices factored in often account for the cheapest materials, the most basic fittings and the most standard fixtures.

If you wish to change any of these, you could incur an extra cost.

Some of the parts of the home that you may wish to ‘upgrade’ during this process include:

  • Roof: depending on the materials you choose for your roofs, such as tiles or colourbond, this can vary widely
  • Tiling: an allowance for a tiling amount per sqm will be made, but this can change depending on the quality and size of your final choice.
  • Fixtures and fittings: fancy, nonstandard taps and European appliances will cost more than standard Australian-made fixtures and fittings. Additionally, labour costs may increase if you select items that are more complicated to install. Inclusions such as fully ducted air conditioning can cost up to $10,000 (more for two-storey home).
  • Kitchen: If you’ve ever shopped for a kitchen benchtop, you know how widely costs of a kitchen upgrade can vary. Again, the final price will depend on the quality of the item you choose and what is in your initial specification in the contract.
  • Electrical: If you decide to change your lighting layout from what has been initially drawn, this can add costs. For example, if the specifications in your contract allow for one standard light per room, but you wish to have multiple downlights, this extra cost can add up.

What are the hidden costs of building a house?

There are a number of costs that people often aren’t aware of. Take soil, for example. Did you think of the soil?

If the land needs added soil for the foundation, this can be a large extra cost, dependent on the type of soil required (in increasing order of quality: M soil, H soil, E soil and P soil). Obviously.

It’s about $5,000 for M classification, then goes up in approximate increments of $5,000 for H classification, E classification and P classification.

Often necessary and legally-required in homes that are near bushland is bushfire protection. A bushfire attack level (BAL) is a means of measuring the severity of a building’s potential exposure to fire.

It costs $3,000 to cover for the lowest risk BAL 12.5, $6,000 for higher risk BAL 19 and $13,000 plus for BAL 29, which is within 10m of a bushfire hazard.

An outlined a number of smaller hidden costs when building:

  • Council specific building conditions
  • Developer covenant conditions
  • Rock removal
  • Removal and connection costs, e.g. NBN

Finance for building a home

If you’re not sure how you’re going to finance your build, then you might be looking at getting a loan. But how do you get a home loan for a property that hasn’t been built yet? You get a construction loan!

A construction loan is a specific type of home loan designed to assist the funding of a new home’s construction. They typically charge interest-only repayments for the duration of the build, which is initially set at 12 months in most cases. They can also divide your loan into stages based on what part of the building process is occurring, a method known as progressive draw-down or progress payments.

Construction loans can be complex so that we won’t get bogged down with them here, but you can check out our separate guide to them. Generally speaking, you won’t be able to get a normal home loan on a home that hasn’t been built yet, since the lender won’t be able to value it properly.

What are the energy-efficient tips for building and saving money?

A study from Mitsubishi Electric found that a whopping 96% of Australian households are worried about their rising energy bill. Being energy efficient is a massive cultural issue which Aussies are concerned about, so here are some tips on how you can save money on your energy bill when your building your home and afterwards when the home is finished.

Looking for the best home constructions? Look no further! Hitch Property Constructions has the ultimate list of home designs for you to choose from.

Solar

The solar hot water systems are becoming more common in Australian households, with some builders offering solar-powered hot water systems as a standard inclusion and governments offering solar rebates.

Depending on the location and actual energy use, households with solar can expect to save around $1,000 – $2,000 on their annual energy bill.

Residential solar systems typically cost between $4,000 – $8,000. For a bigger 10kW system, prices are $8,000 – $14,000.

So you might not make savings on these systems straight away – it generally takes a few years before the energy savings overtake the initial installation cost.

Lighting

Switching five 50w halogen downlights for two 15w compact fluorescent lightbulbs could save you between $80 to $140 per year.

When it comes to efficient lighting in a modern home, LED downlights have set a new standard in appearance and energy efficiency – they’re long-lasting and use about a third of the energy of halogen lighting.

Heating and cooling

Heating and cooling can add up to around 40% of a household’s energy use, and Ms Prichard said it’s important to consider how you set up your air conditioning units and heating appliances in a new home, to help optimise efficiency and minimise costs long term.

When considering a new unit, split systems will be beneficial year-round and can be more effective and efficient than portable units.

Homes warming up with a split system can save up to $572 over winter depending on where you live when compared to a portable unit.

If you’re considering a whole house ducted unit or refrigerated cooling, consider zoning capabilities for different rooms. This will ensure you can heat up or cool a single room, or part of the home, rather than the whole house – this could save you thousands over the course of a year.

Windows and doors

A new home build should include double glazed windows and doors to contribute to the energy efficiency standards of new builds.

This will help block out noise and also reduce heat penetration by up to 40% in comparison to standard glass.

Laundry

Perhaps the easiest tip of the bunch is to install a washing line instead of having to use a clothes dryer. Ms Prichard said this could save you around $80 per year.

The prospective buyers often fall in love, mapping out the next ten years of their lives around the walls they’re walking. As a result, when faced with the possibility they might lose the house to other buyers, people make offers and buy a property that far exceeds their budget and means.

But the sentimental grapple is something that is far more prevalent when building a house, given the creative, hands-on process. Defining a budget, prior to any plans, is vital to keep costs at a desired level.

The benefits of speaking to a financial adviser are again evidenced here, as they’re a qualified individual who can give you a clear figure to work with.

The average cost of building a house varies due to a range of factors, including size, location and quality of fixtures and fittings.

Giving you an estimate of the final price will depend on whether you chose a display home which the builder has designed with cost efficiency in mind, or a unique home- your own special castle which has never been built before.

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