Building your dream home from scratch is an experience like no other. It is a big investment, and the process – from buying the land to receiving keys – can take years, with plenty of decisions to be made along the way, including where to buy land, which builder to choose and whether to use an existing design or create something entirely new. But building your own new home is a life-changing experience and a deeply rewarding journey, one that tens of thousands of Australians embark on every year.
Home building is a big job and how to get started is the crucial question. Firstly, you need to decide that it is definitely the right choice for your family. The entire process can take months to years, so it is essential to be sure it’s what you want to do. You will also have to have living arrangements in place for the interim period.
So before starting on the journey here are a few things you should think about:
- Why are you building your new home – is it to raise a family or is it an investment?
- What is your budget – realistically how much can you afford to spend?
- Where do you want your new house to be?
- What size and layout do you want?
- Will it be one storey or two?
- What are the important features for you, such as design and energy efficiency?
- Do you want to create something new or go with pre-made customised design?
Once you have answered these big questions it is likely you will have a clear idea of what you want from your dream home.
The average cost to build a house in Australia in December 2023, according to the Australian Bureau of Statistics, was $394,981. Townhouses sit at a national average of $350,246. Of course, this figure does not factor in buying the land, the price of preparing the site or planning and council fees, but it will give you a rough idea of how much it is going cost.
The amount you spend will vary depending on the size and style of building but also state in which you are building. For example, houses cost more than townhouses, but constructing a dwelling in the Northern Territory, where labour and materials are harder to come by, will cost you significantly more than what the same building would cost in South Australia.
Below is a snapshot of the cost of building in each state or territory.
New South Wales: House – $433,154 and Townhouse – $355,072
Victoria: House – $412,762 and Townhouse – $393,605
Queensland: House – $389,911 and Townhouse – $288,535
South Australia: House – $310,737 and Townhouse – $278,909
Western Australia: House – $335,550 and Townhouse – $295,803
Tasmania: House – $374,822 and Townhouse – $450,051
Australian Capital Territory: House – $452,572 and Townhouse – $316,525
Northern Territory: House – $434,325 and Townhouse – $326,700
Location, location, location – it is the most well-known real estate saying.
The location of your property will have a fundamental impact on your lifestyle, as well as your finances. Typically, home builders have two choices when it comes to location – buying in a new suburb where there are housing estates, or finding a suitable block to build on in an established area.
Finding a vacant block or old property to develop does take more time, effort and cost. You will also have to investigate if there are any easements on the title, development overlays, building restrictions or rules on how the land can be used.
Site preparation will also be necessary and can throw up some expensive and challenging surprises. But the benefit of buying land in established suburbs is that you know exactly what is available in your community including amenities, cafes, schools, and transport. In some cases, you can find land where a developer has already done the hard work knocking down the old residence and submitting planning permits to council so the block is almost ready to go, but this will increase the price tag.
The other option is to buy land in a new development. These are large areas of land that have been subdivided by a developer into perfect sized house blocks and tend to be located further from the CBD but fulfil the promise of a dream home in a budding new community. There will also likely be a new shopping centre, new schools in the pipeline and a planned network of bike and walking trails nearby.
Building in an estate vs in an established suburb
There are two common scenarios when it comes to building a home. The first is finding a property with an existing home to knock down and rebuild from scratch.
The second option is a house-and-land package, where you buy a plot and then choose a house design on offer from the developer. Both offer advantages and some disadvantages, and usually the final choice of which path to take comes down to personal preference as well as budget.
Knockdown rebuild
If you already own a plot of land with an existing residence, the benefit of demolishing and starting again is that you do not have to move location in the long run. You get to keep the same address and stay near the same schools and local coffee shops – but in a brand-new home. In some cases, home builders want to keep some structural elements of the existing home, but this can actually add significant cost, so in many cases it is best to knock it down and start anew.
However, before getting started you will need to check the council has no special rules or restrictions, which may impact your ability to build the home you want.
Why a new home doesn’t have to mean a new neighbourhood
Custom costs
When it comes to design and construction, it is likely you will need a custom build to suit the block, which can be expensive.
To get an idea of price it is best to estimate your construction costs per square metre. However, it is important to remember this price guide does not include costs of site works, buying the land, GST or hiring professional services like an architect.
So, be sure to factor more into your budget when working out your final figures.
Below is a table to guide you on the building cost per square metre 2023/2024 for single and double storey dwellings.
- Sydney : $2350 sqm to $7200 sqm
- Melbourne: $2200 sqm to $5500 sqm
- Brisbane: $2800 sqm to $4950 sqm
- Canberra: $1940 sqm to $3850 sqm
- Perth: $2300 sqm to $4450 sqm
- Adelaide: $1860 sqm to $3800 sqm
- Darwin: $2150 sqm to $4000 sqm
*The Rider Levett Bucknall’s Riders Digest 2024
House and Land packages
For people that do not yet own a property and want a new build, a house-and-land package is a smart choice, offering the same outcome without as much hassle. Ready-build packages are usually offered in housing estates where lots have been created to suit an array of house styles and designs that the home builders have on offer.
The benefit of a house-and-land package is that you do not have to bring in expensive architects and designers, as developers have dozens of different house designs to choose from. So, you can create your dream home, but at a much more affordable price than a custom build. The package prices are also fixed, so apart from site costs or any additional customisations you can be more confident of the end figure you will pay.
Another perk of buying into a new subdivision is the developer not only makes planning and design simpler, they usually have planning and building permits in place so building can start sooner.
What is a house and land package and what to look for?
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Like any property journey, building new and buying off the plan have advantages and disadvantages. While these may differ due to personal circumstances, here are the common upsides and downsides of building.
Pros
1. A personalised home
Rather than going to dozens of open houses only to find that each one is not quite right, building allows you to construct a dwelling that is perfect for your lifestyle.
2. Affordability
Housing affordability is at its worst point in the past two decades. Over the past four years alone, house prices have risen 39.9% nationally, according to PropTrack data. Coupled with rising interest rates, buying conditions are tough and many first home buyers have been completely priced out of the established market. While supply issues caused building costs to increase since the pandemic, government incentives and flexibility on location means building new remains an affordable option.
3. Tax concessions
New builds offer financial perks including reduced stamp duty and can attract government grants worth thousands of dollars. These vary by state so make sure you check out what grants and concessions are available.
4. Green building
Modern homes generally offer better energy efficiency and increasingly, people can request sustainable materials and techniques be used during construction.
5. Modern design
The major draw card of building new is that you can incorporate the latest design, appliances, finishings and even tech throughout the home.
6. Less maintenance
New usually equals less work. Plumbing, electrics and the structure are all newly installed making it unlikely you will have to pull out the tools or call in a tradesman. New builds also come with warranties and guarantees, which add an extra layer of protection for home buyers if something goes wrong.
Cons
1. Time
Building a new home requires patience – in terms of the time it takes to settle on location and design, but also if construction is hit with delays, which is not uncommon.
2. Hidden costs
Unfortunately cost overruns are always a risk when it comes to construction. Driveways, soil testing, unforeseen site preparation and bushfire zone restrictions are just a few of the surprises that homebuilders can encounter.
3. Location
Knockdown and rebuilds can occur anywhere so location is not an issue. However, packaged deals are typically in housing estates, which, due to their size, are located further from the CBD. This means you may not have access to transport and some of the services promised by developers may not be established for years to come.
As they say, Rome wasn’t built in a day, and unfortunately your new home won’t be either. Homebuyers often want to know how long it takes to build a house and the reality is that most projects take six months to a year, while some larger bespoke jobs will take longer.
It is a lengthy and time-consuming process to get permits, see out construction – with or without delays – review the property and settle. However, off-the-plan builds tend to be a quicker option, as much of the documentation is already in place.
Extensions are a great way to adapt your current home to your needs and, in some cases, can be much more affordable than bulldozing to rebuild. You should consider an extension if you need an extra bathroom or bedroom to suit your growing family if the layout is simply not working or you want to upgrade the living space. If you are considering adding to your current home, do not rush into the process – like any other aspect of real estate, it is a big task and can end up being costly if you don’t think it through.
Ask yourself the following questions to help determine what type of extension you should build and the overall cost.
- Do you want to increase the current size of your home?
- Will an extension reduce your outside areas too much?
- Will the council allow you to add an extra storey?
- What development overlays exist in your area?
- What type of design and quality of materials will you choose?
- Will you also have to renovate other areas of the house to match the new additions?
- Are you adding bathrooms?
- What kind of permits and red tape do you need to navigate?
- What kind of site access does your land have?
- Will you have to budget for asbestos removal?
- Will demolition or excavation work be required?
How much does it cost to build a second storey?
Turning a single–storey home into a double storey is not as simple as choosing where the staircase goes and plonking an extra floor on top. An extra floor needs to be suitable for your needs but also safe, so the first step will be getting plans drafted. This will help determine how high you can go and what types of rooms you can include.
An architect or registered builder will need to be brought in to create a plan, ensure your home is structurally sound and that the foundations are adequate. Before going down this path you will also require the normal planning approvals and building permits. Considering these factors and the fact that every extension will be unique, it is clear that adding a second storey will not come cheap.
Cost of a house extension
As a general guide, extension experts say a basic light frame addition may cost you anywhere between $1,800 to $3,000 per square metre. This increases dramatically to up to $15,000 per square metre for a luxury or heavy-duty build. Before locking in a contract, it is best to approach several builders for quotes to give you a better idea of how much the extension is going to cost.
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