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

Many Australian homebuyers weigh up the decision between purchasing an existing home and building something from scratch. One of the first questions they will ask is: How much does it cost to build a house?

It’s a short question, but there are few short answers. Each home building cost depends on a number of factors, from the price of the land itself, to the design, materials, size, labour, and other features. 

Not to mention, labour shortages in the construction industry are making it difficult for some home builders to hire enough staff to complete their projects on time and on budget. Here are some of the key factors influencing the average price to build a home, and what you can expect from your built house cost.

How much does it cost to build a house: The short answer 

According to the Australian Bureau of Statistics, the average price to build a home in Australia in 2022-2023 was $394,981.

By state, the averages were as follows: 

• NSW    $433,154
• VIC       $412,762 
• QLA     $389,911
• SA        $310,737
• WA      $335,550
• TAS      $374,822 
• NT        $434,325
• ACT      $452,472

Furthermore, the average cost of new townhouses nationwide was $350,246, and the average cost of new apartments nationwide was $416,736. 

How much is a plot of land?

The land itself also adds a large cost to the overall price of a new home construction. The Urban Development Institute of Australia (UDIA) issued figures for land costs in their 2024 State of the Land report. 

Some of the key area and city median lot prices shared included: 

• ACT   $679,375 (the most expensive greenfield land market in Australia)
• Greater Sydney  $641,250
• Greater Melbourne   $394,250
• South-East Queensland  $374,250
• Greater Perth   $245,250
• Greater Adelaide  $258,560

The report went on to note that aside from Greater Perth, all markets saw significant reductions in sales volumes. Overall, the UDIA reports annual lot sales were down 28% in 2023.

“This report is the clear evidence that Government needs more focus on boosting development ready land supply if it is to have any hope of achieving its ambition to permanently ease housing affordability and improve dwelling delivery,” said Col Dutton, UDIA National President.

Unexpected costs of building a new home

There also may be unexpected or hidden home building cost considerations. This is especially true for first time builders who are unfamiliar with all of the factors that determine a final built house cost.  

One of the most common ways to take these costs into account is by looking at the price per square metre. However, another approach that can be more accurate is to look at the property perimeter and roof style. 

Hidden costs of building a new home include making changes and modifications to standard home designs without fully considering how that will impact the final bill, the cost of site preparation such as soil tests, delays, and more. It’s a good idea to chat with your home builder ahead of time to know what to expect should any of these situations, such as delays or material price increases, arise. 

The key factors of any home building cost

There are many factors when it comes to determining the average price to build a home. Even just determining the cost of a four bedroom home build is complicated and highly dependent on different decisions you make along the way. 

For example, a spec home will usually be more affordable than custom home designs, which give you exactly what you want, but may come at a higher price. 

Here are the three key factors to keep in mind: 

Materials

The materials selected to build your home will majorly inform its final home building cost. Ensuring your budget correlates with the style you’re after is important. G.J. Gardner Homes offer various building materials and styles at different price points to ensure you can build a home that works for you.

Location and Land

The price of land is a major contributor to the overall cost of building a home. The land type and location can impact the construction process, as well as the materials you require to build a high-performing home. G.J. Gardner Homes offers house and land packages to streamline this process, using our industry expertise to put the right home in the right environment. The average price to a home will, of course, vary depending on the city.

Size

A basic factor that will inform the final built house cost is your home’s size. More expansive homes and homes with plentiful bedrooms will naturally cost more, requiring more materials and labour. Finding a home that can support your family’s future realistically is an important consideration in the planning.

To work out what you can afford, research home loan options so that you can make informed decisions on land and design – you may want to speak to your bank or work with a financial adviser or mortgage broker to help with this stage.

How labour shortage issues are affecting construction in Australia

The Master Builders Association (MBA) has recently released a report stating the need for more construction workers. 

“The number of people joining the industry each year is not enough to keep up with demand,” it claims.

As of May 2024, there were approximately 1.37 million people employed in building in construction.

A boost of growth following the pandemic saw the industry return to the status quo, however, MBA states that the industry needs a lot more new workers to keep up with demand.

“If the workforce can rapidly increase from 1.37 million to 1.5 million, then the industry may be able to meet the targets of the National Housing Accord for 1.2 million new homes by the end of 2029 by the skin of its teeth.” 

The MBA report goes on to support “bringing more people into trade apprenticeships, tapping into skilled migrants from comparable jurisdictions, and creating a more diverse and inclusive culture that will draw professionals from other sectors into this industry” to help meet the demand for workers.