How Much Does It Cost To Build A House

How Much Does It Cost To Build A House

How much does it cost to build a house? The first question most prospective self-builders want to know the answer to, and for some, the only real hurdle to starting on a self-build journey. Many people’s ideas of what it means to build their own home are what they see on TV — gargantuan builds with multi-million-pound budgets (that still somehow run over). However, in truth, there is a self-build home for every budget, and if you’re smart with your budget, it’s not a high-risk venture. 

Imagine the possibilities—every detail just exactly the way you want it to be without having to settle for what’s already on the market. The opportunity to build your own house is exciting, but it can be a big investment, ranging from $158,572 to $478,600 and averaging nationally at $100 to $200 per square foot.

Shopping for a new home based on existing inventory can be hit or miss: One house might have many features a buyer loves but be in the wrong neighbourhood, while a home in the neighbourhood the buyer loves may be more ramshackle than expected. In addition, house prices vary wildly based on which part of the country the market is in, which part of the state, and sometimes even the side of the street home. Building your own house allows you to customize every detail and control the budget, as long as you’ve budgeted for the occasional surprise. In addition, building your house lets you deeply understand the inner workings of the place in which you spend most of your life.

This means, of course, that there are many components to learn about when pricing a potential build. So we’ve broken down the different elements that go into building a house to help you understand how to afford a newly constructed home that best suits your style and budget.

How Much Does It Cost To Build A House?

Building a house is not only a daunting experience but a very expensive one as well. While there are plenty of costs that you may have already thought about if you’re looking to undertake this venture, there are many costs that can be hidden.

Be sure you’re ready for all the costs that are tied to building a house from scratch.


This is probably one you’ve already thought of. You’re going to have to build your dream home out of something, so that’s going to cost you a fair bit of cash.


Another one you’ve probably thought about. Your builders aren’t going to work for free, so you’re going to have to fork over good money for your labour.

Soil and contour tests

This is possibly one you haven’t thought about, but before laying down any quotes, a builder is going to want to conduct two separate tests; one on the soil and one on the contour of the land. Naturally, any difficulties that can be seen by building on your soil will incur an extra cost. Similarly, builders will assess the slope of the land. Generally, the more of a slant you have, the more it’s going to cost you. As a rough guide, expect to pay around $5-10k for every 1 metre of fall across your property, depending on how drastic it is, and even more if the fall is sideways across the block.

Site costs

Site costs are probably the most variable cost you’re likely to encounter when building a new house. This is based on things like the soil and slope difficulty, whether the site is difficult to get to, whether you have to remove trees and roots, retaining walls are required and other unexpected elements.


Believe it or not, many quotes you receive from your builder may not include the cost of putting down flooring. The theory behind this is that you pay to have a house erected on the slab and that things like carpet, floorboards, or tiles will cost you extra.


Because it is not strictly part of the building itself, many builders’ quotes will not include the cost of a driveway. The cost of a driveway can vary depending on your preference for getting your vehicle from the street to the garage.


Make sure you factor landscaping into your final budget because your builder is unlikely to do so. It’s not uncommon to see builders including 15 square metres of turfing as part of the finishing touches, but don’t expect an oasis-like set-up if you’re not willing to pay a little bit extra.

Natural disaster considerations

This one might seem a little unfair, but if you’re looking to build in an area that may be more prone to feeling the effects of a natural disaster, it might hit you in the hip pocket. For instance, if you’re planning to build in an area prone to flooding, your new place may need to be designed just in case of that 1 in 100-year flood occurring. Similarly, you may need to obtain a Bushfire Attack Level rating for properties surrounded by bushland or built in areas that are known bushfire spots. Of course, any assessments and modifications needed come at an additional cost.

Land registration

This one is likely to impact you if you are building on a new distributed piece of land and are putting a property on that land and connecting things like plumbing and electricity.


That’s right! Not even the humble wheelie bin is free. You’ll need to contact your local council to get a set of bins delivered to your property once you’re ready to move in.

Fees for closing roads and causing disruptions

Are you going to need to close down a section of the road for operational purposes (cranes etc.)? That’ll cost you. Councils and sometimes the state government will bill you for disrupting the status quo on their roads.

Design modifications

It’s also a certainty that things will go wrong throughout the building process, and modifications need to be made to the initial design of the house. Unfortunately, making such modifications can cost you cash for several reasons; the extra labour and materials, needing to enlist the help of an architect and/or surveyor or in some cases resubmitting plans for council approval etc. So be prepared for these “emergency” instances.

Construction loan fees

During the construction period, your loan will usually be interest-only to reduce the number of your repayments until the building is finished. However, you may attract some additional building costs on your mortgages, such as extra valuations or progress payment (drawn-down) fees. Your lending specialist will be able to explain these fees during your home loan appointment. 

How To Calculate How Much It Costs to Build a House

There are many variables when estimating the cost to build a house. Each category of construction and finish will be available in a range from economy to luxury, so the actual cost and budget for each category are dependent on the builder’s preferences.

While you can choose to serve as your own contractor, a new construction building is a minefield of permits and ordinances and a grand dance of coordination. Unless you’re planning for this to be your full-time job for the length of the build, the next step is to consider interviewing several general contractors and hiring one to shepherd your project through from start to finish. Although you might be committed to building the house yourself, a good contractor should be able to show you how they can save you money and alert you to potential pitfalls. Hiring a general contractor will account for 10 per cent to 20 per cent of your total project cost, but it may save you from committing expensive errors. Once you’ve established that, the contractor should be able to help you with specific estimates.

To calculate how much it costs to build a house, start by choosing and adding up the following:

  1. To calculate the cost, you’ll need to know the size and footprint of the house. If you’re working with an architect, plan as much as possible before seeking estimates for materials and services. Last-minute adjustments can add significantly to the price. Calculate the square footage of the house and the dimensions of the footprint—for reference, the average cost to build a new home is $150 per square foot, but in high-end markets, that number can soar, so seek multiple estimates as you choose your materials.
  2. Get estimates for how much it will cost to clear the property and prepare the site, including tree removal, excavation and grading, soil testing, and city utility connections.
  3. If your house will need a foundation, get several estimates for the excavation, soil removal, and material and labour costs to pour the foundation.
  4. Using the square footage and diagrams of the room division plans, a contractor will be able to help you estimate the cost of framing materials and labour.
  5. Decide on the type of exterior cladding (which includes insulation and choice of siding) you prefer, then get estimates or bids to compare. This is an area where you can save significantly on the material cost based on your preferences and choices because there is a wide range of pricing from economical vinyl siding to mid-range wood siding up to luxury custom finishes, including natural stone and stucco. In addition, there is often space for negotiation on this cost based on the vendor and the amount of material you’ll need. Choose windows based on your design, and price out options.
  6. Consider the home’s major systems, including electrical, gas, HVAC, plumbing, and technology wiring. You’ll need to add the total cost of materials, including the foundation pieces such as the breaker box, meters, boilers or furnaces, and condensers, along with connection components such as wires, junction boxes and switches, pipes and connectors, and outlets. Labour costs to set and install these systems can be high and variable, based on the systems you choose and regional variations of labour costs, so seek multiple estimates and ensure whether or not the estimates provide a flat project cost, including materials itemize individual material costs and labour separately.
  7. Interior finishes, such as drywall, flooring, cabinets, and ceilings, will vary in material and labour costs based on what you choose and the size and dimensions of the surfaces you have to cover. Estimates will help you calculate this sum.
  8. Permits: New construction requires permits and inspections at almost every turn, and missing one can complicate the process later. Visit your local town assessor, survey offices, or town’s municipal offices to ask for a list of necessary permits and their list of costs.
  9. Other professional costs: A general contractor will add 10 per cent to 20 per cent to your cost. Architects, engineers, drafters, and designers are likely to charge an hourly rate that can be negotiable depending on the level of services. Interview and seek proposals from contractors before hiring them, then add the price to your total cost.

Factors in Calculating How Much It Costs to Build a House

Once the basic systems and structures that need to be in place during a build are understood, home builders can begin to make decisions that allow them to prioritize those aspects of the house that are important to them and fit them into the budget. Remember that the national averages are just averages—and that everyone has different ideas about how to build a house. For some builders, the size of the house is the most important part, while others emphasize the number of bedrooms or bathrooms, and others look to maximize outdoor living spaces. The total cost will be based on these priorities and the local market.

Size and Shape

It stands to reason that the bigger a house will be, the more it will cost. This isn’t a straightforward calculation, though. Sometimes adding a second story to a smaller footprint can be less expensive than spreading that square footage out into a larger one-story home because the two-story house will save on land preparation, foundation, and roofing costs. However, the shape will also significantly affect the total cost: Every additional corner or odd angle on the exterior requires more framing, flashing, and finishing material and adds labour time and cost. A round library room on the corner of the house may be your dream, but the cost of framing and finishing that rounded room may mean you’ll have to sacrifice elsewhere, depending on your budget.

Design Features

Does your lifestyle include outdoor living? Will you need an outdoor kitchen, pool, patio, or deck? These features will obviously add to the design, material, and labour costs, but they also may be less expensive to include in the original build than to add on later. When labour and material are budgeted into the cost of a large project, the goods and services may be discounted. If these features aren’t at the top of your list, this is an area where you can cut back so you can spend the money on other elements that are more important to your lifestyle.

Number of Stories

Adding multiple stories to a home can add costs to design and construction work, but it can also be less expensive than adding the same square footage to a one-story design. For example, multistory houses require different levels of support framing on the basement and first-story levels to support the second or third levels, but larger single-story homes require larger foundations and more roofing. For many new-home builders, this choice is nonnegotiable, as the home they’ve envisioned has a particular style. For others, the cost is more important than how the square footage is distributed, and the less expensive option will win out.


Basements can add $10 to $100 per square foot to new house construction, depending on whether they are partial or full depth and whether they are finished or unfinished. It’s important to check with local regulations about basements, as many municipalities have codes that specify the depth of a basement and the number and type of egress points required. These considerations are important because adding egress points to a completed basement can be an unexpected and significant cost.

Geographic Location

Some areas are simply more expensive to build in than others. Whether it’s the cost to transport materials, availability of skilled labour or just the market value of those services, the city and state in which you plan to build will have an effect on the entire cost of the project. In addition, when building on a very remote site or difficult to access, expect to pay more for transportation and labour to cover travel time and the potential to stretch utilities to the new home.

Material Costs

All told, the materials to build a house will make up approximately 50 per cent of the total cost. This means, however, that the builder’s selections have the power to influence that overall cost. For example, vinyl siding costs about $2 per square foot, while custom stone can ring up at more than $30 per square foot. As a result, it’s possible to make economic material selections without sacrificing safety or appearance to save money or spend it on other priorities. Lumber, concrete, drywall, flooring, siding, and roofing are all materials that come to mind but don’t forget insulation, endless lengths of wires and pipes, nails, staples, and other hardware.


The cost to hire workers to design, build, roof, power, plumb, finish, and decorate a house (and to clean up the debris after it’s built) is not insignificant. A full 30 per cent to 60 per cent of the budget will go to subcontractors and experts in their fields, but this amount will be tied, as everything else is, to the size and design of the house and the chosen materials. So the labour to put down a simple hardwood floor will be less than the labour to lay an intricate mosaic tile floor in a custom design. Capable homeowners can perform some finish functions to save on labour costs, but others, particularly whole-house systems and framing, should be handled by professionals.

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