Summary
How much can you expect to spend when building a house in Australia today?
If you’re dreaming of building a new home, you may be wondering how recent events have affected house construction prices including builder's costs and stamp duty fees.
The answer to this could be summed up with that frustrating yet often accurate phrase: How long is a piece of string?
Several different factors can affect the cost of building a house, including but not limited to
The size of the dwelling
The location and availability of resources the slope of the land
The quality of the fixtures and fittings
With this in mind, there are some “ballpark figures” I can come up with, to give you a guide as to how N much it may cost you to build a property.
Note: So many factors have increased building costs!
It's worth understanding that when building a new home:
40-45% of costs of the total cost to build is the cost of materials
Around 35-40% of the cost is labor.
There are many taxes and charges, insurance, and overheads
And the build would like to make a profit margin of around 15-20%
It all started a few years ago with Covid-related restrictions.
Thanks to volatile exchange rates, supply chains being impacted, and reduced productivity due to COVID-19 restrictions, floods and rains, costs have risen and the time to complete projects has dragged out pushing up the cost of construction.
Then there are the supply chain issues around the world due to the Russian-Ukraine war and things are getting worse.
The shortage of materials and labour is likely to significantly increase housing construction costs over the next couple of years.
As a result of a persistent, severe shortage, the price of skilled trades people rose sharply by 10.4 per cent over the year to the September Quarter 2022 according to the HIA
And this has occurred at a time when we're building more homes than ever
As at the June Quarter 2022, there were over 104,000 houses under construction across Australia, a record high and 81.2 per cent higher than pre-pandemic levels. Renovations activity has also shot to record levels.
This elevated demand for home building has exacerbated the pre-existing shortage of skilled trades
Then, believe it or not, despite all the trees we have in Australia, before COVID-19 roughly 20% of Australia's structural timber came from abroad, mostly from Europe.
The boom in residential construction here has coincided with a surge in construction in major overseas markets like the US and Canada, meaning overseas suppliers have been unable to meet this shortfall.
Currently, builders are facing significant supply constraints, labor and material shortages are a significant impediment and inflation is driving up the cost of materials;
Timber prices have risen well over 20% over the last few months and this is phenomenal what we are seeing around the world.
The cost of reinforced steel has increased by over 40% over the last year
Plastic piping costs 26% more than a year ago
The result of all this is that the average home cost $76,000 more to build today than 12 months ago!
Valuers Charter Keck Cramer has considered the Australian Bureau of Statistics (ABS) price indices of residential housing across Australia to understand the change in prices across various materials used in the construction of housing.
Some key takeouts include:
Price increases across various items, in several states, are the highest since the introduction of the GST in 2000 (or in some instances since the GFC in 2008/2009). This has led to an overall increase in costs across Australia (across all price groups tracked by the ABS) of +13.6% since the start of COVID-19.
The items that have increased the most are timber, board, and joinery (such as structural timber, timber doors, windows, plywood, and board) as well as steel products (such as steel beams and sections and reinforcing steel).
It is observed that timber, board, and joinery have increased the most in Adelaide whilst steel products have increased the most in Brisbane.
Average house building costs in Australia
House building costs across all major Australian markets are growing faster than inflation – a trend that looks set to continue for years due to construction demand outstripping supply for both labor and materials.
Disruptions caused by COVID-19 were largely to blame last year with global supply chain issues negatively impacting both material delivery and pricing, while state and international border closures led to intractable labor shortages.
This year the Russia-Ukraine war’s effect on the cost of oil and aluminum, transport blockages, and supply chain shortages are having an impact on further price increases.
THE AVERAGE COST TO BUILD A HOUSE PER SQUARE METRE
BMT Quantity Surveyors’ latest report shows the average cost to build a house per square meter of new single and double-storey dwellings throughout Australia for the third quarter of 2022.
The costs in the table below are for Sydney, but you can still use them as a guide by applying one of the following regional variation percentages.
This will give you an approximate cost for the construction type per square meter in your area.
Cairns - 110% - 130%
Brisbane - 95% - 115%
Sydney - 100% - 100%
Canberra - 92% - 120%
Melbourne - 95% - 105%
Hobart - 95% - 120%
Adelaide - 95% - 108%
Perth - 98% - 120%
Darwin - 110% - 135%
Construction type. Level of finishLow Medium HighCost To build a house3BR weatherboard project
home, level block, single level, shelf design $1,690 $1,892 $2,340
3BR brick veneer , level block, single level, shelf design $1,801 $2,006. $2,395
3BR full brick home, level block, single level, shelf design. $1,793. $2,000. $2,484
4BR weatherboard home, level block, single level, unique design. $2,373. $2,535. $3,164
4BR brick veneer home, level block, single level, unique design $2,521 $2,641. $3,323
4BR full brick home, level block, single level, unique design $2,861 $3,268. $3,550
3BR brick veneer home, level block, two level, shelf design $1,878 $2,075. $2,559
3BR full brick project, level block, two level, shelf design $1,948. $2,190. $2,687
4BR brick veneer, level block, two level, unique design $2,636. $2,979. $3,458
4BR full brick home, level block, two level, unique design. $2,913. $3,345. $3,651
Architecturally designed executive residence. $3,866. $4,949. $6,923
Cost to build a townhouse2BR single level brick veneer
townhouse including allowance for common property . $2,649 $3,013 $3,394
2BR 2 level brick veneer townhouse including allowance
for common property. $2,720. $3,064. $3,560
3BR single level brick veneer townhouse including allowance
for common property. $2,624. $2,987. $3,3563
BR 2 level brick veneer townhouse including allowance
for common property. $2,694. $3,139. $3,573
Cost to build units3 level walk-up unit complex,
concrete structure, ground floor parking. $2,789. $2,993. $3,631
3 level walk-up unit complex, concrete structure, basement parking $2,732. $2,936. $3,573
4-8 level unit complex, incl lift, concrete structure, ground parking $3,185. $3,427 $4,152
4-8 level unit complex, incl lift, concrete structure, basement parking $3,115. $3,356. $4,083
8 or more level unit complex, including lift and basement car parking $3,305. $3,751. $4,770I
....
Source: BMT Quantity Surveyors
THE AVERAGE COST TO BUILD A HOUSE IN EACH AUSSIE STATE
But average building costs per square metre by cities is just one factor to take into account when working out home building costs.
Because the answer to ‘how much does it cost to build a house is more complicated than it might seem.
That’s because the location, size, and cost of the block it’s built on and the finishes all affect how much it costs to build a house.
So the cost of building a house in Melbourne would be vastly different from the cost of building a house in Brisbane, or even the cost of building a house in Adelaide, Perth, or Sydney.
To give a rough idea, in April 2022 the figures from the ABS suggested that, on average, building a home cost around $473,000 (including houses and unit data).
And here is the ABS’ latest breakdown by state:
AVERAGE COSTS TO BUILD A NEW HOUSE BY THE NUMBER OF BEDROOMS
So now we have a vague idea of how much it costs to build a house in Australia depending on the cost per meter square, location, size of the block, and even the fittings. But what about the size?
It’s all well and good to get a ‘per square meter’ indication of price – but how do you translate that into actual costs, to give you an understanding of how much you’re going to pay to construct your new home or investment property. Builders and architects often use a per square meter (m2) figure to cost a project so this is a good baseline to work from, according to a page cost guide.
THE AVERAGE COST TO BUILD A 3-BEDROOM HOUSE
To build a 3-bedroom house you can expect to pay in the region of
$1300 per square meter for a 3-bedroom weatherboard house on a level block, using budget materials
$1600 – $1900 per square meter for a 3 bedroom full brick single level project home, on a level block, using mid-range to high-end materials and finishes
THE AVERAGE COST TO BUILD A 4 BEDROOM HOUSE
You can expect to pay in the region of:
$1,900 per square meter for a 4 bedroom single level, brick veneer home on a level block, using budget materials
$2,400 per square meter for a 4 bedroom brick veneer single-level project home on a level block using mid-range finishes
$2,900 per square meter for a 4 bedroom full brick two-level home on a level block using top-quality finishes
$3,900+ per square meter for an architect designed 4 bedroom full brick, two-level home on a level block using top-quality finishes
THE AVERAGE COST TO BUILD A 5 BEDROOM HOUSE OR SECOND STORY
To build a 5 bedroom house you can expect to pay upwards of $4300 per square metre.
If you want to know how much a second-story extension costs, expect to be charged anywhere from $1850 to $3300 per square meter, depending on the quality and price of the construction materials and inclusions.
Collection By Raymond Ng From Variety Source.
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