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Guide to building costs in Australia

Last Updated Jul 27, 2017 · Written by Richard Kempthorne


Calculating building costs is not easy even for experienced contractors. If you are an owner builder or want to make an independent estimate, the job is much harder and it is easy to make costly mistakes. This brief guide to building costs will help you avoid some of common pitfalls.

This article will help you with:

Building Costs: The Basics

Estimating Building Costs

Australian Construction Building Costs

A house made from $100 Australian dollars

Building Costs: The Basics

There are some basic elements of construction you have to bear in mind when estimating building costs, these include:

  • Excavation and foundations: There are reasons why large housing developments are built on level blocks - they are cheaper to build on and the cost of laying foundations can be accurately determined. If you have a sloping block, you will need to factor in extra costs for laying your foundation and may need to have excavation carried out before you can begin building.

  • Building materials vary widely in cost. For example, a timber framed brick veneer home will cost less than a full brick home.

  • Labour costs vary depending on the size of the construction, the complexity of the design and other factors. A single storey home based on standard rectangular construction will be much less expensive than one that includes irregular angles or curves.

A home in being built in Australian

Estimating Building Costs

 

There are a few ways you can put all of these elements together to arrive at a cost estimate. You can attempt to make an extensive list of all the materials needed to finish your home, but this is rarely necessary. Building contractors calculate their building costs based on previous experience and available data to arrive at a rough estimate and then add on any extraordinary costs. You can take advantage of their expertise in two ways:

  1. Contact a few builders in your area and ask them for estimates.

  2. Use an online building costs calculator or a software program. 

In either case, you will have to do some preparatory work. Whether they are calculated manually or using a software program, building costs are calculated per square metre. The more accurate your plan, the more accurate your initial estimate will be. Follow these three steps and you will get a reasonable estimate of your building costs:

  1. Calculate the size of your house in square metres using the interior size as your guideline.

  2. There are three rough classifications of construction: basic, standard and luxury. Determine which of these classifications is most appropriate for you.

  3. Determine whether or not your building site is going to be easy to build on or difficult.

A very popular way of thinking about the costs of building a house is working out the cost per square metre.  

You can calculate the cost per square metre by taking the total cost of the building and then dividing  it by the total floor space of the building.

Below are some  square metre approximations:

A basic project home  is your cheapest option – $620-$780 per square metre

The next step is a luxury version of the project Home (deluxe) which can cost anywhere between $1,000 – $3,000 per square metre

The next step up is a custom built home you should epect to pay anywhere in the region of  $1,500 – $3,000 per square metre.

Finally you could be looking at between $2,600 and $4,000 per square metre for  deluxe custom built home.


A builder checks plans for the costed new building he is working on

With just this much information, you will be able to get a reasonable building costs estimate, but it still may be not be enough. What other extraordinary building costs do you anticipate? Do you want vaulted ceilings? Do you want your roof to be pitched at a steep angle? Are you building a period style home? Things like these may add significantly to your building costs.

If you have taken all of these potential building costs into consideration, you can be reasonably certain of arriving at an accurate enough estimate to determine whether or not the home you want to build fits into your budget. Now is the time to contact the builder of your choice and work with them to finalise the details of your building costs and get started.

Australian Construction Building Costs (fourth quarter 2015) - Custom-built, single- and double-storey dwellings

 

 

Cost range per floor area ($/m2) - Low

Cost range per floor area ($/m2) - High

Sydney

1,550

4.350

Melbourne

1,365

2,700

Adelaide

1,550

3,400

Brisbane

1,700

3,400

Canberra

1,530

2,507

Darwin

1,750

2,750

Perth

1,420

2,263

 

*Data taken from Rider Levett Bucknall Riders Digest 2016 Melbourne, Australia Edition

Soil quality can also influence the cost of the project.  If for example you have clay, stone or large rocks it will inevitably cost you more.  You can do a soil and contour test which tests quality of your soil and the shape of the land.

Another consideration you should bear in mind os the angle of the ground you are building on.  A sloping piece of land can result in extra costs ranging from $6000 per square metre to $90000 per square.

building-costs-guide5.jpg

Other factors to take into consideration  when calculating your building costs include whether or not you are in a high risk area for flooding or bush fires.

You will probably need to carry out some design work, this will require an architect and can be fairly costly.

With building materials you can buy in bulk  to save money but custom home builds will inevitably cost more in terms of materials.

In some case you may find that having a project manager on board is of great benefit but of course this comes at a cost.

One of the biggest outgoing expenses when managing a building project is labour costs.  Be wary of the fact that subcontractors are more expensive.  This is often how builders will recruit to get all the skills they need to complete your project.

 

 

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