How Much Does It Cost To Build A House In Australia this Year 2023?
If you’re considering a new home for investment or family living, understanding the cost is crucial to your decision to build or buy an already-built home. Constructing a home from scratch may seem daunting, especially if budget constraints are a factor, but the allure of creating a custom-built dwelling on your chosen land is also compelling.
Unless you have a licence to build yourself, you will need to pay a contractor. So, how much does it cost to build a house in Australia in 2023? Let’s take a look.
The Cost of Houses in Australia
The average price of a house in Australia’s combined capital cities in June 2023 was $882,006. The median unit price in the capital cities was $629,862, while the median dwelling value in regional areas is $586,645.
Although innumerable factors go into calculating the specific cost of an existing house, including the home’s age, dwelling condition, location, average market price in the surrounding area, number of bedrooms and bathrooms, how much land is on the property, and so on.
In a country as geographically diverse as Australia, these costs are best viewed as snapshots of the areas in which the property sits. For example, a home in downtown Sydney will fetch far more than one in the Outback. Although, it is predicted that the value of homes and properties in Australia will continue to rise by 5% in 2024 in Sydney and Melbourne, while Perth will see the highest growth rate at around 8%.
Why are we paying more for houses? One reason is that it’s costing more to build them.
How Much Does it Cost to Build a House in 2023?
According to the Australian Bureau of Statistics (ABS), the cost of building a house in February this year was $449,436, slightly up from the previous month’s $445,664. In February 2022, it was $391,937; in February 2021, it stood at $319,261.
Many factors go into the cost of building a house. These include the following basic fees – including other fees to consider when figuring out how much it costs to build a house in Australia in 2023.
Basic Building Costs
● Labour: One of the most basic costs of building a house in Australia in 2023 is the labour costs for the building contractor’s employees. These costs can range from $85 – $150 per hour
● Fixed Charges: When considering a builder for your project, you’ll be required to pay “fixed charges” – these are generally similar across their clientele and depend on the location, project type and season. These are “site preparation” costs and generally encompass architectural fees, surveying fees and other fees accrued by the builder to get them ready to ‘break ground’ on a project.
● Variable Costs: These types of costs when building a house in Australia can vary greatly and include things like material costs and are supposed to account for certain variables that can go into the cost of building a house. These include whether or not the home has a basement (that will require digging out), and what types of materials the home is being built with. Brick is among the cheapest materials to build, while timber is the most expensive – and specific types of wood increase the price even further.
Let’s say you’re buying a piece of land intending to build on it. Even without a property on the piece of land, you’ll need to pay the purchase price of the land itself, including a “stamp duty”, a tax levied against the sale of a property to account for the transfer of ownership. Stamp duties aren’t charged in specific states, but many states do charge the duty, check your state laws! There’s another stamp duty that could be applied towards your mortgage.
Transfer and registration fees are also a part of land sales in most territories and states. These fees are typically around a hundred dollars at the low and slightly over $100 as the price of the property increases.
The cost of building a house in Australia in 2023 is generally calculated as the number of bedrooms in a home. Metrics unveiled in 2021 revealed that the country’s most popular number of bedrooms was a three-bedroom home. There were 3.6 million homes built of that type in 2021, followed by a four-bedroom home at 2.6 million. One-bedroom and five-bedroom homes brought up the rear in 2021 as some of the least popular builds in the country.
Factors Affecting Building Costs
Despite the basic cost of building a house in Australia in 2023, numerous other factors could drive up the cost of building a house.
One of the most significant costs that may surprise would-be homeowners is the material costs associated with home-building, specifically how those prices have shot up in recent years.
A major contributor to material price increases has been the availability of materials. Although global supply chains are nowhere near as stretched as they were during the Coronavirus pandemic and in the preceding year, they’re still not quite flowing freely. Couple this with the destruction of homegrown materials such as Australian timber in the various wildfire events in the country, which have necessitated importing external timbers.
Needing to import specific building materials will significantly increase the overall cost of building a house in Australia in 2023.
Despite the return of external tradies from places like Ireland and Europe – that Australia has historically relied upon for its construction labour – the gaps in the trades profession are still a huge consideration when it comes to the increased costs of building a house.
Reportedly, the Australian construction industry faces a shortage of roughly 111,000 workers by the end of the year, despite the Government of Australia providing apprenticeship incentives to employers.
Project Scale and Size
The base cost of a project is defined by its size and scale. Building a two-bedroom home will cost significantly less than a four-bedroom home. The devil is in the details of a project when it comes to cost. For example, putting in a finished basement will cost you between $250,000 and $500,000.
If, as the landowner, you’re imposing a specific timeframe on your builder, you may incur extra costs for putting a rush on. If you can help it, it’s not advisable to put these added pressures on your builders, as this may lead to them cutting corners to make the deadline and making costlier construction errors. Try to work within the timeframe the construction company gives you.
When it comes to the cost to build a house in Australia, there are myriad considerations – but there are things you can do to reduce some of the more eye-watering costs of building your own house.
Cost Saving Tips
To save money, here are a few options to reduce the cost of building a house in Australia in 2023.
Do It Yourself
There’s no better way to reduce the cost of building a house than to do some parts of it yourself. For example, if you’re in the trades yourself, you may consider applying those skills to your build – doing your plumbing or electricals – is a fantastic way to reduce some of the cost to build your own house. Or, if you’re a skilled carpenter, you may try doing some of the framing work yourself.
Any work that you can do yourself, you should. This will greatly decrease your labour costs. Please bear in mind that all work must be done to the building codes and checked by a professional before a broker can provide any home insurance. This is perhaps one of the biggest drawbacks of DIY.
Choose Cheaper Materials
As we’ve stated above, some building materials are cheaper than others. If you’re looking to save money but still have a wonderfully-built and structurally-sound home, it may behove you to consider building your home with different materials. For example, building a home with brick is, on average, more expensive than building a home with timber. Or, having your kitchen countertops in gorgeous marble will cost significantly more than treated lumber.
Choosing cheaper construction materials, without compromising too much on aesthetics and without compromising at all on safety, is a fantastic way to save money during the build.
Another grand expense that new homeowners incur is buying all brand-spanking new appliances and furnishings. While this is certainly a way of achieving exquisite beauty in your new home, it can also be incredibly expensive. Buying used furniture off Facebook Marketplace or other avenues is a great way to save some money – though perhaps not appliances, as those tend to last for at least a decade or two (sometimes longer) before needing to be replaced.
There are many other cost-saving methods and practices to bring down the cost of building a house in Australia in 2023, so think long and hard before you commit to spending either your own money or the bank’s money!
How Long Is It Taking To Build a House in Australia in 2023?
Before you put down your hard-earned money to account for the cost of building a house in Australia in 2023, you’ll want to know how long it will take for the home to be ready to move into. Many factors affect the length of a project from start to finish – such as labour availability for the building contractor, weather, material shortages, paperwork delays, etc.
Other questions are: are you building on a vacant lot or doing a knock-down rebuild? How many bedrooms are there? The average Australian home is roughly 228.8m2 and is more commonly three- and two-bedroom.
Accounting for these mitigating factors, the average length of a build is around 10 – 12 months, though some may be faster or take longer.
A House in Australia: Is It Better to Build or Buy?
It’s time to tackle the age-old question of property ownership: is it better to build or buy? There are many factors to consider in answering this question, but we’ll just focus on the main ones.
According to statistics, it is cheaper – on average – to build a home rather than buy. It all depends on your budget and the current cost of building a house in Australia in 2023.
Condition of Current Dwelling
Building your own home allows you to start from scratch with new materials and not have to worry about the condition of the home you’re buying and worrying if you’ll need to spend any money on renovations. Sometimes, it will make more financial sense and be less stressful to kick the old house over and build brand new on the same lot.
Sometimes, life throws you curveballs, and you must spend some money quickly. If you’re faced with a situation where you need to buy a home and move into one relatively quickly, then buying a pre-built home may be your best bet. However, building your own house may be more beneficial if you can wait a year or so for your new home.
Stop Dreaming. Start Building!
Suppose you’re looking to build a new home. In that case, maybe you’re looking for a new start for your new family or are seeking to make some extra income with a rental investment property. The cost of building a house in Australia in 2023 is presently at a steady growth rate of around 5%. This is projected to increase in 2024. Despite the ballooning material costs and labour shortage, this is a good time to build a house in Australia.
If you’ve been searching for a custom home builder in Sydney for your dream house, call us at Provincial Homes, and we’ll get you started with the process of building your dream home.
Frequently Asked Questions
What is the average cost of building a house per square metre?
According to HiPages, the average cost to build a 3-bedroom house in 2023 are as follows:
$1,300/m2 for a 3-bedroom weatherboard house on a level block, using budget materials
$1,900/m2 for a 3-bedroom full brick single-level project home on a level block using mid-range materials
How much does it cost to build a four-bedroom house?
According to HiPages, the average cost to build a 4-bedroom house in 2023 is $2,400/m2 for a 4-bedroom brick veneer single-level project home on a level block using mid-range finishes; or $3,900+/m2 for an architect-designed 4-bedroom full brick, two-level home on a level block using top quality finishes.
Is it cheaper to build or buy?
On average, it is generally considered to be cheaper to build your own home than to buy a pre-existing dwelling. Although there are many factors to consider.