Building a house in Australia is a significant investment, and the costs in 2024 are influenced by factors such as location, house size, design complexity, and materials. With the construction industry facing challenges like labour and material shortages in recent years, understanding the breakdown of expenses is essential for prospective homeowners.
Rising Construction Costs
Since the COVID-19 pandemic, construction costs in Australia on average have increased by over 40% in most states, with Queensland experiencing the sharpest rise at over 50%. These increases were driven by supply chain disruptions, material supply and labour shortages.
In 2024, however, the market shows signs of stabilization, with cost growth returning to single-digit percentages. While the upward trend continues, the rate of increase has slowed.
The Major Costs of Building a House in Australia
To provide a more comprehensive understanding of the expenses involved in constructing a new home, here is a detailed breakdown of the major cost components that will contribute to your overall budget. Covering everything from land acquisition and site preparation to construction, interior finishes, and external features.
1. Land Costs
The price of land, depend significantly on ones purchase location.:
- Metro Areas (e.g., Sydney, Melbourne): $500,000 to $1 million+ for small blocks.
- Regional Areas: Starting from $200,000.
2. Site Preparation
Preparing the physical site for construction, can add a significant cost:
The costs for site preparation typically range from $10,000 to $50,000 for clearing and leveling the land, while soil testing and surveys add an additional $1,000 to $3,000.
3. Construction Costs
- Basic: $1,600 – $2,500 per square meter
- Mid-Range: $2,500 – $3,000 per square meter
- High-End: $3,000+ per square meter
A 200-square-meter house, at these basic rates will cost between $320,000 – $500,000 and where high-end fit and finishes are used, the same size house will cost approximately $600,000 or more.
4. Council Fees and Permits
These costs include, Development Applications (DAs) which range between $5,000 – $20,000, depending on the council. Local utility (including power, water and phone / fiber), supplies and home connections, depending on the distance to run the services, into the property can also range between $10,000 – $30,000.
5. Design and Professional Fees
Architect or designer fees typically account for 5% to 15% of the construction cost, while engineering and certifications add an additional $5,000 to $10,000.
6. Landscaping and External Features
External costs, including driveways, fencing, and landscaping, typically range from $10,000 to $50,000. Depending on the land size, to finish a house completely, to make a home, these costs should not be underestimated and can add up quickly.
7. Timeframe
Delays in building a house can significantly impact overall costs, often in unexpected ways. Delays in construction often arise from factors like bad weather, material shortages, labor unavailability, scheduling conflicts with contractors or subcontractors, and supply chain disruptions such as backordered materials. Waiting for council approvals and workforce shortages are also common causes of setbacks. Being aware of potential delays and their associated costs is essential for accurate budgeting.
Final Thoughts
Proactive communication with your builder is key, it can help reduce their likelihood and mitigate financial impacts, making it essential to account for potential setbacks when budgeting.
When combining all factors, the construction-only cost of building a house in Australia in 2024 ranges from $400,000 to over $1 million, with the total budget escalating significantly when including land acquisition, depending on the location, land size, and desired features.
Lastly, careful planning and budgeting are essential, as while construction costs have somewhat stabilised, the overall expense is still highly influenced by factors such as location, parcel of land (size), and design preferences. Prospective homeowners should consult local builders, designers, and real estate professionals to obtain accurate and tailored estimates for their projects.
