Cost to Build

The Hidden Costs of Building a New Home

Building a new home is a great adventure. It should be a fun, enjoyable and stress-free process. After all, this is a time when your dreams come true. You’re building your future and life is good.

Unfortunately, the hidden costs of building a house can potentially jeopardise these dreams and your future happiness. As a new home builder, it’s important for you to be aware of the hidden costs of building a home.

Keep reading to learn about the different factors that will affect how much you pay for your new home.

Changes and modifications

One of the biggest traps in building a new home comes from the costs associated with changes and modifications. It’s so important to be aware of material upgrades that will add to the standard cost breakdown of building a house. If you upgrade items such as floorings, appliances, finishes and lighting—these will likely be additional to your initial negotiated cost to build, and your typical building costs will naturally increase.

If you start to make small modifications, you may not notice the cost initially. But it stands to reason, if you make a lot of small changes, or if you make large or structural changes to the plans or package, it could end up significantly adding to the cost breakdown of building your home.

Make sure you have an upfront conversation with your new home consultant or builder about the level of changes and modifications that will be included in your contract.

This is particularly important if you’re comparing a display home to a quote or estimate you’ve been given by a builder. It can be easy to fall in love with a floor plan and certain range of fittings and finishings, but often, the display homes you tour (whether virtually or in-person) will be a modified version of a standard plan. It’s therefore vital that you have a clear understanding of any gaps in cost. For example, the display home you visited may have marble benchtops in the kitchen, where your estimate may only cover laminate.

Builder promotions and offers

You’ll be amazed by the sheer number of home package deals available in the housing market. The thing is, many package deals promise the world but fail to deliver on the marketing hype. Simply put, many of these promotions are too good to be true, and are actually obscuring hidden costs in building your new home.

If you’re wondering if you should consider an offer born from a ‘deal’ or promotion, read our guide about builder promotions and offers

Site preparation

Site preparation is an area which is often overlooked by first-time home builders. Every block of land undergoes a site survey and soil test prior to construction.

If your block is difficult to access or is situated on a slope, your typical building costs will be higher. Likewise, rocky or highly-reactive soil will need to be included in your cost breakdown of building as they can increase your build costs due to needing different foundations. You also need to make sure that your sewage, water, stormwater and electricity connections to the street are covered in your cost breakdown. 

Although these costs are often unavoidable, if you uncover them early, you can better budget for your new home build. Read more about the three reports you need before paying a builder’s deposit.


It’s always tempting to cut corners to save money. In the spirit of being sensible, you might decide to forgo those extra cupboards in the laundry or install cheaper kitchen and bathroom appliances. What appears to be common-sense at the time can actually turn out to be “false economy” in the long run.

Cheaper appliances, fittings and finishes may require fixing or replacement in a shorter time frame and can affect the resale value of your home in later years. The moral of the story is: focus on quality and lasting value.


Where budget allows, make sure that finishes such as landscaping, driveways and window furnishings are included in your contract initially. These are not always included in building contracts and can add hidden costs to building your house.

Plan ahead

Within the building industry, it’s acknowledged that home renovations can cost significantly more (per square meter) than new home builds. That’s why a new home design should accommodate both your current and future lifestyle needs.

For example, if you’re a couple with plans to have children in the future, it’s much cheaper to build that extra room or two at the onset. The same can be said for kitchens, bathrooms, garages and storage spaces. Obviously a lot will depend on your budget, but always try to think long term.


Costs associated with delays are a great example of hidden costs in building a house. These can be caused by you as the buyer through changes and modifications, or if you are late in paying stage payments.

Delays can also be caused by your builder, who may not have prioritised your property over others they are completing. Delays may also be completely out of your control or your builder’s control, such as weather or contractor availability.

The weather… well there’s not much we can do about that! But some careful contract clauses can help avoid these hidden costs of building a house. Make sure you ask your builder about the costs associated with delays, and what is being done to mitigate these.

Change of mind

Finally, if you’re looking to avoid hidden costs, we’d recommend avoiding making excessive changes to your plans or build. Not only do changes of mind often attract additional drafting and material and labour costs, they can also cause costly delays.