How Much Does it Cost to Build a House in Australia?

Before designing your dream home, it’s essential to discuss the cost. Currently in Victoria, the price for building an average-sized home sits between $2,000 to $4,300 per square metre. With total costs between $480,000 to $1,032,000 for a typical 240 square metre home.

Our guide breaks down everything you need to know about the cost of building a home. We’ll dive into the average costs in both Victoria and the rest of Australia. It’s also important to understand the determining factors, including how different designs, locations and materials all affect cost. While your building contract will typically break down all of the costs involved in your project, it’s great to be aware of any hidden costs well before you reach that stage. Building a house is one of the most important decisions you’ll make in your life, and by understanding the costs, you can feel more prepared to take the leap.

Average Cost of Building a New House in Victoria

To help convey the price of your new build, we’ll refer to the cost per square metre. Although most builders don’t price their projects this way, this is a simple and effective way to communicate the cost. Within Victoria, the average cost for building a house ranges from $2,000 to $4,300 per square metre. This range accounts for both lower-end and higher-end builds. The following table shows the average build cost by home size:

Based on these estimates, the cost for building an average-sized 240 square-metre home is between $480,000 to $1,032,000.

Note: these figures are general estimates, with final prices varying heavily upon your exact location, design, size, and any labour or material costs.

How Does Victoria Compare to Other States?

The following table shows how Victoria compares to other states for building a house:

Factors Affecting the Cost of Building

The exact cost of your home build will depend upon a variety of factors. The following are some of the common ones you may encounter:

Location & Site Conditions

The land you choose to build over is just as important as the home itself. This is where everything will be built, and if it requires extensive site costs, this can be expensive. Site costs refer to all the expenses related to land preparation, such as clearing trees, levelling ground, or addressing drainage. For example, the cost of levelling a sloped block can start from $5,000, but exceed $50,000 depending on the type of slope, the ground that’s being excavated and the overall volume of work required.

There’s also the cost of the land itself, which will vary significantly depending on your region. Typically, urban cities or desirable suburbs will have a higher price of land than regional areas. Based on the Urban Development Institute of Australia’s 2024 report, the major cities across Australia have the following median lot prices:

Design & Customisation

The complexity of your house design will affect the cost. For example, if you choose a custom builder who allows you to tailor every aspect of your home’s design to your personal preferences, this may increase expenses. This is because more complex designs often require skilled labour or expensive materials. You may also look to incorporate bespoke features into your custom build. Including: high ceilings, complex rooflines, and large windows, which can significantly increase cost.

Simple designs are usually more affordable to build. One way to reduce cost is by choosing a volume builder. These companies construct hundreds of homes each year with pre-designed floor plans. They are typically more cost-effective because they streamline the entire construction process. However, their established designs mean there is little room for customisation. Furthermore, because they offer both high-end and lower-end options, they are not always cheaper than custom designs.

Architecturally designed homes are generally the most expensive option due to their high level of design complexity and customisation. These builds are also relatively rare, making up only 5% of new home builds.

Size and Layout

The larger or more complex the home, the more materials, labour and resources required. For example, a home with 5 bedrooms, 5 bathrooms and 2 living spaces is going to cost substantially more than a single-storey 3-bedroom home. It’s important to keep your budget in mind when designing the size of your home, which fits your means while satisfying your lifestyle.

Materials & Finishes

Deciding what materials to install will have a huge influence on your final price. These decisions can be made across your entire house, everything from your exterior to and interior fittings. Typically, choosing budget-friendly fittings such as laminate benchtops and batten light holder fittings with shades and globes may reduce cost. Higher-quality materials, such as granite countertops or natural stone, will be more expensive.

Although installing high-quality materials involves a higher upfront cost, it can save you money in the long term. This is because choosing cheaper materials may lead to frequent repairs or replacements over time. Prices for all construction materials are known to fluctuate based on market conditions, so we recommend consulting with an experienced builder such as Forme Homes for the most up-to-date information.

Labour and contractor fees

Incorporates the cost of hiring the various contractors, electricians, plumbers and builders needed to complete the home. The exact cost will vary depending on your location and the availability of skilled workers, but it will usually be about 40% of your total cost. Particularly, if you are constructing more complex designs, you may have to pay a premium for tradespeople who are skilled to deliver the sort of result you’re looking for. These hirings will be made by your builder, which they factor into your overall cost.

Approvals, Fees & Services

All construction projects, including a home build, will require permits and approvals. These are typically approved by your local council and essentially ensure your home abides by zoning and building regulations. Typically, your builder will handle this step, with the final cost added to your project bill.

What Government Grants are Available for Building a House?

A great way to support your new home build is to access government grants that reduce the cost. The following concessions can save you money if you qualify for them:

First Home Owner Grant (FHOG)

For any first home buyers, you can access Australian government support grants to offset home building costs. Under the FHOG, eligible first-home buyers in every state and territory (except the Australian Capital Territory) can receive $10,000 for building a new home valued up to $750,000. Although exact eligibility requirements will depend upon your state or territory, these are only available if you are choosing to build, or buy a newly built home, and aren’t available to those who are buying established homes.

Stamp Duty Concessions

Although not technically a government grant, if you choose to build, you can make significant savings on stamp duty. This is a payment you have to make to your state or territory government when you purchase a house or property. You save when you choose to build because you are only paying for the cost of land, which is typically much lower than buying an already established home. Particularly in states such as Victoria, which have some of the highest stamp duty charges in Australia, choosing to save by buying land instead of an established home can lead to significant overall savings.

Hidden Costs of Building a New Home

It is vital to be aware of any additional costs that you can factor into your budget. These can include:

Certification and inspection fees

Part of building a house is conducting inspections at the various steps of construction. This ensures that the construction is adhering to codes and regulations, and may also identify any potential problems before they occur. These inspections are carried out by building surveyors and will usually cost between $400 and $600. These costs are typically factored into your contract.

Security and Temporary Site Costs

Costs that are often overlooked during construction include budgeting for temporary site costs. For example, as a security measure, fencing will be set up around your property to keep it safe, which may cost around $7-$10 per metre of fencing. Portable toilets and temporary bins for rubbish removal can all increase costs. Again, these costs are typically factored into your contract.

Moving expenses

As part of your new build, you will need to budget for moving everything from your existing home. Typically involves hiring a removalist and/or a storage unit, with costs depending on the distance and transport volume. Depending upon your circumstances, you may need to organise accommodation while your new home is being built. If you need to sell your current home to fund your new build, it’s especially important to think about costs for renting or other temporary accommodation.

Landscaping and outdoor features

Once your home is built, your building contract may not always factor in the additional costs for landscaping and external features. These can include constructing driveways ($3,000 – $10,000, depending on type and size), fencing ($5,000 – $10,000), lawns ($5,000) and any decking or outdoor entertainment areas (over $10,000).

Land preparation and Soil test

Before you begin construction, soil tests will need to be carried out to determine the stability of the ground. This may alter the type of foundation or land preparation required from your builder. For instance, you may need extra soil added or removed to ensure your foundation is fully secure. Initial soil testing can set you back between $400 to $600, with higher costs if extra land excavation is needed.

Bushfire and flood compliance

If you choose to build in an area prone to bushfires, this may increase your overall cost. This is because under the Australian government, your new building must adhere to specific construction standards as a way to ensure added protection against bushfires. Typically, these requirements include: installing ember-resistant vents, specialised roofing, and using fire-resistant materials.

Additionally, if you choose to build in a flood zone area, you may be required to install an additional drainage system or raise the flooring. Complying with these construction standards can add between $5,000 to $20,000+ to your overall budget, depending on the final requirements.

How Long Does it Take to Build a House?

The exact length of your build will depend upon many factors, such as the complexity of the project, weather, construction delays, and material shortages.

Labour availability is a key factor at the moment, with increased demand for construction projects meaning more workers are needed to keep up with the growth. Buildskills Australia, a government council focusing on supporting the construction industry, estimates that 90,000 more workers are required to satisfy the demand for new housing projects. This means that new builds that may have previously taken 6-8 months are now taking as long as 12 months to finish.

The bottom line, the average build length for an Australian home should usually take around 10-12 months. Although, depending upon the previously mentioned factors, this may be faster or longer.

Is it Better to Build or Buy a House?

Buying an already established house can be a great option because it allows you to see exactly what you’re getting. You can also move in practically right away, and there’s no need to worry about working through a building schedule and feeling stressed about delays. Particularly if you want to live in an inner city suburb, and your budget doesn’t allow for a knock-down rebuild, purchasing an established house may be your only option.

Although building a house will mean you’ll have to wait, on the other hand, this means you can create your dream home from scratch. This allows you to craft the perfect house to suit your lifestyle and needs with almost endless customisation. You may want to add a separate laundry or extend the size of your backyard or kitchen. These are all options that you can include in your new build that may require extensive renovations for an existing property. You can also choose to harness the newest technology and modern designs to set yourself up for the future.

There’s also the question of price. Like the length of time it takes, there’s no easy answer, with the exact costs depending upon many factors. Although building has historically been the far cheaper option, the rising cost of construction has meant this answer is no longer as straightforward. According to current reports, building is marginally more expensive than buying in the majority of capital cities due to higher land prices. However, building will typically cost less in regional areas; however, these prices are averages and are likely subject to change, particularly as forecasts suggest the cost of construction may reduce.

Chances are, you have already decided on whether you are building or buying. Particularly, if you are living in a city, you may have already decided to buy an existing property in your dream suburb. However, if you’ve always dreamt about building the perfect home, these added costs won’t outweigh the clear advantages of creating a space tailored for you. A knockdown rebuild could also be a great solution, allowing you to buy an existing house in a sought-after area, then transform it into your dream home.

Building your dream home will be one of the most exciting decisions in your life. When considering your new build, it’s important to know exactly how much you should expect to pay. Location, design and size are all important factors in determining your exact cost, while also considering government grants and any hidden costs. The team at Forme Homes are the expert in building your perfect home. If you’re looking for a reputable builder with over 50 years of experience, please contact their helpful team here and begin your construction journey.