In 2020, several variables come into play when determining the cost of building a house in Australia. The most obvious factors include:
- Size of the home
- Location as well as the availability of resources on the piece of land
- The quality of fittings and fixtures
These factors help in giving a rough initial estimate of the cost of building your property. There are additional costs when it comes to building custom designed homes
Before we delve further into this, let’s look at the impact of the Coronavirus pandemic on the construction sector. Unlike other industries, the construction sector is regarded as an essential service and has hence not halted its operations due to Coronavirus. Despite this, home builders across Australia have experienced a considerable drop in sales over the last few months. This has resulted in job losses and economic turmoil in the housing market.
With reports suggesting that sales have dropped by as much as 40%, builders are eager to take up projects. The cost of construction has, however, not decreased since the cost of building materials has significantly increased. The major concern with Coronavirus is that it might contribute to construction companies going under receivership. You should, therefore, be careful before getting into a building contract by first confirming the builder’s solvency status.
How Much Should You Expect to Pay?
You should first understand that the base price you see on adverts is only the starting point. It is not a reflection of how much your house will cost upon completion. Other specific factors inclusions are carpeting, landscaping, driveways and picket fencing. These factors are normally included in the “turn-key” package where you only have to wait for the completion of construction then turn the key and enter your new abode.
Depending on where you are situated in Australia, building costs vary widely. Here is an overview of the average building costs of a new home. They are ordered in terms of city, the type of finish and price per sqm:
- Home design Brisbane, Queensland, Basic, $1210
- Home design Brisbane, Queensland, Medium, $1390
- Sydney, New South Wales,Basic, $1190
- Sydney, New South Wales,Medium, $1290
- Melbourne, Victoria,Basic, $1180
- Melbourne, Victoria, Medium, $1330
- Perth, Western Australia,Basic, $950
- Perth, Western Australia,Medium, $1000
- Adelaide, South Australia, Basic, $900
- Adelaide, South Australia,Medium, $1030
The building costs would be higher when you hire custom home builders to construct homes with tailored designs. The price may range between $1500 to $3000 per sqm upwards.
How Do You Calculate the Average Price?
Other than simply stating the average cost in terms of “per square metre” you need to know how to translate it into actual costs. This will give you an understanding of the amount of money you will pay. We are going to use an example of a standard home that is around 150 — 170 sqm. Depending on the size, 3 to 4 bedroom homes that have 1 or 2 bathrooms are priced as follows.
- A basic, budget-style home
3-bedroom costs upwards of $160,000 while 4-bedroom costs upwards of $190,000. The turnkey package has an additional $18-20,000
- A Standard Home
3-bedroom costs upwards of $180,000 while 4-bedroom costs upwards of $200,000. The turnkey package has an additional $20-22,000
- A Premium, High-End Home
3-bedroom costs upwards of $200,000 while 4-bedroom costs upwards of $220,000. The turnkey package has an additional $22-25,000
It may cost you an additional $80-100,000 to add an extra story.
Understanding the Lingo
You are likely to encounter a plethora of jargon during the home building process. They may be trickier to comprehend than the pricing itself. Here are a few important terms that are likely to be included in house building contracts.
This refers to the estimated amount of money that is calculated by the constructor. It is how they perceive the material or job will cost. The builder is normally unable to provide a fixed price to specific parts when signing the contract or providing a quote since there are several unknown variables present. These unknown variables often contribute to additional costs on top of the initial estimate. It is advisable that you set aside an extra 10% of the total building cost to cater for these unexpected variables. You will thus be prepared for any fluctuation in price.
This refers to items liable to change during the construction of your home. Things like fixtures and fittings are likely to change depending on your final decision. Custom home builders provide an estimated cost that relies on your finishing requirements during the contract signing. This raises or lowers the prime costs if you decide to change them during construction. For example, a standard brick house without any custom designs is fairly economical. However, with extras such as driveways, fences, landscaping, and retaining walls, it raises your costs significantly.
Examples of additional expenses include:
They are expenses you incur on the preparation of your piece of land even before you begin constructing. Often, they are inclusive of the build price. The estimated average price of any piece of land is about $ 15000 to $ 25000. However, the final price is dependent on certain factors such as location and size and the sloping of the piece of land.
Site cost may also include typical costs such as:
- Site survey
- Retaining walls
- Site clearance
- Soil test
- Connection to essential services e.g. sewer, water, gas, and electricity
Factors impacting on price
Builders set up a pre-start meeting after signing a contract. The contract has the design and layout of your property. A council then has to approve it before making any final changes on the design aspect, for example, type of light fittings, material for the roof and floors, and wall color. Of note is that the contract packages the only factor in the cost of the cheapest materials with the most basic and standard fixtures. If you desire to alter this, you might incur additional costs. Aspects of the house upgradable include:
Varies depending on the material you select, could be tiles or color bonds.
Measured on the amount per sqm but varies according to the size and quality of the tile selected.
- Fittings and fixtures
Choosing elegant, nonstandard European appliances costs more than the standard one. It also costs extra if the items are complicated to install.
The prices of kitchen tops widely vary and are dependent on the quality and initial agreement in the contract.
This is also dependent on the specification of the initial contract. You could want multiple downlights instead of the agreed standard one light per room, costing you extra.
Here are examples of the extra cost that could raise your cost significantly:
- Soil quality
It is the first thing an engineer organizes and tests out. They perform this by boring holes then testing it. The best soil classification is M classification. Any other such sand, rock, and clay is harder to work with and most likely will cost you extra.
- Sloping of the piece of land
A flat piece of property is easier to work with. A sloping one requires an extra foundation or cut and filled to make it flat. This ends up costing you extra.
- Areas prone to floods
Such sites need the floor level of the house to be raised above the natural ground level to deal with situations of floods or excessive rain adding to building costs.
- Variations in the contract
Lastly, any alterations on your already signed contract affect your build price. You gain the ability to change your mind on design aspects however this ends up costing you more. Custom home builders score up to 20% – 25% on variations with a variation fee of $250. Ensure you agree on these fees in your contract.
In summary, the average price of custom-designed homes is dependent on factors such as location, quality of fixtures, and fittings, and size. The final price depends on whether you decide to build from a design of best home builders with cost efficiency in mind or one that has never been fabricated before.