Building a custom new home in Melbourne is an exciting journey; it’s also a unique opportunity to create a truly personalised space that completely supports your lifestyle.
At SECON Constructions, we love meeting with potential clients who are excited about their upcoming home building journey. And while these clients generally have a clear vision for what their home should look and feel like, oftentimes they don’t have a proper grasp on the costs involved in building.
We repeatedly see clients putting aside sums of around one million dollars, assuming this will cover the entire build. While it is certainly possible to build a new home in Melbourne for one million dollars, the total cost wholly depends on your brief, the complexity of your design and site conditions, among other factors. This also doesn’t account for additional and unexpected costs such as GST and consultant fees.
In this blog, we’re demystifying the costs associated with building a new home. We’ll delve into a selection of factors that can impact the cost of your home and provide insight into exactly how and why. Continue reading to learn more.
Size matters
It goes without saying – a larger house requires more materials, more labour and sometimes more specialised equipment to build. A larger house may also take longer to construct unless a larger team is employed. At SECON Constructions, we always try to find a happy medium between cost efficiency and quality.
In many cases, an experienced architect and builder can work with you to optimise your home’s design for space and functionality. This might involve integrating clever storage solutions and multi-purpose rooms or tweaking your floor plan to maximise the usable area, without sacrificing comfort. This way, you can achieve a remarkable new home that fits your budget without unnecessary square footage.
Build quality
Higher-quality materials, finishes and fittings are naturally more expensive than their lower-quality counterparts. This isn’t just due to the cost of the raw materials themselves, but the expert skills involved in crafting these items. Higher quality materials are often more intricate, requiring specialised installation to ensure flawless results.
This translates to more time and expertise required during construction, which means labour costs will increase proportionately. Of course, the benefits of quality construction generally outweigh the upfront investment, as you will likely enjoy a more durable and aesthetically pleasing home with fewer maintenance headaches down the line.
Complexity of design and level of detail
Complex designs crafted by architects, particularly those involving voids, split levels and open plans, cost more to achieve than simple designs created by building designers or draftspeople. Architectural plans will often be trickier to bring to life and may require specific materials and specialist contractors.
The most economical house plans feature what we call ‘standard details,’ which incorporate simple and conventional skirting, cornices and architraves, with standard door and window sizes. These items are universally understood and available rather than components that must be imported, customised or carefully constructed.
Time is money
Time plays a significant role in the cost of building a new home. A builder with a larger team of experienced tradesmen who can guarantee a faster completion date will naturally come with a premium price tag. This is because they can dedicate more resources to your project, streamlining the construction process and minimising delays.
Conversely, a sole operator or smaller team, while offering a potentially cheaper daily rate, may take significantly longer to complete the build. This can extend the project timeline, potentially leading to unforeseen costs like additional material storage fees or rent, if you’re living elsewhere during the build.
Site access and site conditions
Throughout the build, your builder will need access to your site for delivery, storage, machinery and of course, construction. Any issues or conditions that impact site access are likely to add cost to a project – this could be anything from sloping blocks and unusual soil conditions to underground rocks (which may need excavation) and proximity to water (including a beach, lake or floodplain).
While these barriers can all be overcome by an expert builder, there is likely to be a higher cost involved. This is why most display homes are built on regular, flat blocks. If your site has any of these features, don’t despair. A skilled team of professionals, including a builder, engineer and architect will be able to overcome these obstacles to realise your vision.
Luxury items and the latest technology
The allure of luxury features and cutting-edge technology can be a double-edged sword. While they may add comfort and chic to your home, luxury additions can have a big impact on your build cost. For example, while a basic rectangular swimming pool might start at a seemingly reasonable $60,000, additional (and necessary) features like fencing, covers, heating and self-cleaning systems can easily double the initial cost. Anything more than a basic pool design and you can expect to add another few thousand dollars to your bill.
Similarly, smart home technology offers a vast array of options, each one adding to the overall price tag. While these features can enhance your lifestyle, it’s crucial to consider both the initial and ongoing costs associated with them. This includes maintenance and potential upgrades down the line.
Energy efficiency
While energy-efficient features offer long-term savings on utility bills, they can add to the upfront cost of building your dream home. In Victoria, builders are required to achieve a minimum 6-star energy rating for new homes. This translates to essential features like high-performance windows and insulation, which may increase traditional building costs.
Luxury homes strive for even higher ratings (7 stars or more), which can be expensive. These might incorporate elements like hydronic underfloor heating systems, solar panels or even geothermal power – all fantastic for the environment but with a heftier price tag. Recycled materials can also be an attractive option, but keep in mind they might be harder to source and potentially more labour-intensive to install, further impacting the overall cost.
So, what exactly does it cost to build a home?
Unfortunately, there is no one-size-fits-all answer to this question. The total cost of a new home depends on the factors above, among others, and is best determined by a professional quantity surveyor or cost estimator.
As a rough guide, we have put together an example below, which assumes an average build cost per square metre of $3,000. Please note, this is an example only and prices will vary significantly. For instance, the cost of building a basement will differ greatly from the cost of building a kitchen.
A note on architectural fees
For a long time, architectural fees have been estimated at approximately 10% of a building’s construction cost. At SECON Constructions, we believe this is too low. We see the fee more accurately being between 10% and 15%, especially when engaging a high-quality and experienced architect.
Budget allowance calculation example:
A 300-square metre house built at $3,000 + GST per square metre = $900,000 + GST
Site conditions: for a significantly sloping block with limited access, allow an extra 15% of $900,000 = $135,000 + GST
Luxury items: for a heated swimming pool with cover and self-cleaning capability, allow an extra $120,000 + GST
Landscaping and fencing: allow an extra 15% = $135,000 + GST
Existing house demolition and site preparation: allow an extra $30,000 + GST
Architectural fees including interior design: allow an extra 5% of $1,320,000 = $66,000 + GST
Other consultants and fees: allow an extra $25,000 + GST
TOTAL BUDGET ALLOWANCE = $1,411,000 + GST= $1,552,120
From this example, we can see that someone wanting to build a 300-square-metre home with a $1 million budget will be short $552,120. This is why it’s so important to understand the real costs involved in building your home from the get-go.
From this example, we can see that someone wanting to build a 300-square-metre home with a $1 million budget will be short $473,670. This is why it’s so important to understand the real costs involved in building your home from the get-go.
