house building

What Is the Cheapest Type of House to Build?

The most affordable way to build a house means cutting costs in the right places. Find out the prices of materials to build a house and which types might save you the most money.

If you’re shopping for a home, market prices can be intimidating. In some cases, it might be more cost-effective to build a home than to buy one in your area. While this wouldn’t necessarily be true if you’re comparing new construction to a house from the 1950s, this may be true in areas where home prices are steep.

If the building looks to be less expensive in your area, you can take steps to create a more affordable home. 

Is it Possible to Build a Cheap Home?

It is possible to build a cheap, and there are many options when doing so if one plans and researches correctly. Another added option is tiny houses. While you can buy a prefabricated dwelling or a customised small house on wheels, you can save a bundle if you make your tiny house yourself. The average cost spent by a do-it-yourselfer building their tiny dwelling is around $23,000, according to a 2015 survey. But you can create one for less—a lot less.

The obvious first step to reducing your budget is to reduce your overall housing needs. Generally, the smaller the house, the fewer materials you need and therefore the less money you’ll spend. Along with that, smaller homes will require fewer resources to heat, cool, and maintain them over time.

But before you rush off and build a tiny house, you need to address what your housing needs are for your family. While little/small may be the best way to save money for many people, there are situations you have to address before you fall in love with small home plans. Click here to learn some critical points to evaluate whether tiny/small homes are suitable for you. 

Beyond that, it is entirely possible to end up spending MORE on materials per square foot on a tiny house build than you would if you’d built slightly larger. Aim to strike a balance of materials to living space when planning your home.

Building the Cheapest Type of House

First of all, keep in mind that there are different types of houses you can build. Your home will be other depending on what you want to develop. Depending on what you plan to make, you can choose from various kinds of houses.

For instance, if you want a small house but it is also affordable, there are many other options to choose from, such as mobile homes or condominiums. You can also choose a more permanent structure that will last longer, such as a barn. These are just some of the types of houses you can construct.

In general, the smaller and more straightforward your home, the lower the cost. Here are the cheapest types of houses to build.

Tiny house

tiny home

Generally defined as houses with square footage between 100 and 400 square feet, tiny houses are typically the cheapest kinds of houses to build. That said, fitting your everyday needs into a small space often takes some custom work, so there may still be some costs to the custom cabinetry and custom fixtures required. Plus, there can be regulatory hurdles to living in a tiny house —many municipalities don’t allow them or restrict their use—and not everyone wants to live in a small little space.

Shipping container house

Prefab shipping container homes are a popular kind of flatpack house. Unlike traditional wood or brick homes, these use repurposed steel shipping containers, which work surprisingly well as the basic building blocks of a place. With a little bit of work, these shipping containers can build some of the most beautiful houses you’ll ever see.

A shipping container house or tiny house is technically the cheapest houses to build but can be small if you’re not willing to spend the extra. If you’re looking for something without the quirks, a prefabricated house is the cheapest regular house to build. A shipping container home can cost as little as $15,000 if built DIY and with minimal features. A three-bedroom prefabricated home can cost as little as $50,000 covering a giant landmass and with added features included, and a tiny house can cost $23,000 if, again, you build it yourself.

These houses are often also more cost-effective than traditional housing. While the national average cost to build a house is around a thousand dollars for every m2, you can get twice as much space for the same price as shipping containers. Plus, with some help from a good team of architects, engineers, and builders, you can even build a 100 m2 house for as low a cost as $USD 75,000 (or $AUD 110,000).

Shipping containers also make for easily relocatable homes as assembly and disassembly are pretty simple than traditional construction techniques.

With all that said, prefabricated houses aren’t the be-all and end-all of affordable houses. Not all prefabricated house designs can fit all households, and some cities and suburbs don’t even allow the building of these kinds of houses. Unfortunately, with cases like these, you might have to spend a little more money and time building a custom-built house.

Building A Duplex

Another option is to build a duplex which is a two-story house with two different floors. You can also use two stories for a penthouse. However, this can be very expensive because it is more complicated than what we usually see with residential buildings.

There is a way to get answers to your questions regarding the cheapest type of house to construct. You can go to the internet and search for some companies that are willing to give you their estimates. However, when asking a company to do this kind of work, they should give you the estimate and explain why it was cheap.

The reason why they were so cheap is that they are not selling anything to you. They are not selling you anything because of how much it will cost them to do the job. So, instead of asking, “what is the cheapest type of house to build?

Instead, ask them what the most inexpensive way of doing it is. It may be the simplest way or the least expensive. Ask them about their plans to find out their goals that would be best for your situation. You will also be able to get answers to your question, “what is the cheapest type of house to build?”

Once you have found their plans, ask them to make you a contract for you to follow. They should include the price and the time they estimated for the project to know how much you should expect to spend.

Building Pre-Requisites

Also, ask them if there are any pre-requisites to building the house you are thinking of using their construction plans. You should be aware of the things that will need to be considered before the construction can start.

One thing that will need to be considered before the project needs to begin is building the house’s foundation. If the land in front of your home is not flat, the house will not be made on it. A foundation is an essential part of any home to help hold the foundation of the house together.

Flatpack home 

You can also save up a lot of money by building a flatpack house instead of a custom-built one. Custom house designs may build beautiful homes, but these can cost anywhere between $3000-$5000 per m2. In contrast, a modular, prefabricated house costs much less. Even in densely-populated states like Victoria, volume builders like Metricon have homes with prices as low as $1300 per m2. Flatpack houses with conventional house plans also take a lot less time to build as the basic building blocks are usually manufactured in a factory instead of built on-site.

Ways to Build a Low-Cost House

A successful project will result in a house that you will not only enjoy living in every day but will also meet the requirements in your brief – and a significant part of your brief is your budget! 

Most of your cost-saving exercises will take place during the design and planning phase of the project. A thoroughly well-considered design that’s weighed up all cost ramifications could save you a fortune! It’s well worth taking the time to find a good architect to get this bit right. Their fee is a small percentage of the build cost, but the right design can end up saving you more money overall (as well as providing you with a home you’ll love!).


A surefire way to add additional costs to your self-build would be to start with a detailed plan full of curves and complexities. Labour will represent a big chunk of your self-build costs, so it’s worthwhile interrogating every aspect of the design. For each detail or junction, your architect should think: how complex (and costly) is this to build?


There’s no one ‘cheap’ solution here, and you should weigh up this decision against factors other than the cost of the materials. Durability, life-span and maintenance will all affect the overall cost of your house over a given period. Do you imagine living in this house for the next 25 years? 50 years? 100 years? A cheaper construction now may not result in the most affordable overall cost during its life-span. A similar argument can be made for the build’s eco-credentials. For example, it may be well worth spending a little more getting some efficient insulation in the walls to keep your heating bills down for years to come!


Labour can account for a high proportion of overall costs, so you may consider doing it yourself as much as you can. This decision will undoubtedly affect the construction method you go for.

Find a suitable lot to build on.

If you end up choosing to build a free-standing home on your lot, it’s essential to pick a lot that’s already fit for construction, as many modifications can cost you a lot of money.

For one, you need to find a lot with the right kind of soil. Level bedrock is ideal because it won’t slide or move with water runoff, but most builders can still work on loamy or sandy soil. Your chosen lot should also have level ground because the custom foundations or extra retaining walls needed for sloping lots can add thousands of dollars to your building costs.

Ideally, the lot should also already be connected to essential utilities like heat, electricity, and water. Otherwise, you’ll be spending a lot of money and time coordinating between builders and utility service providers. Finally, you should make sure that the lot already complies with state and federal building codes, as you won’t be allowed to start construction until it does.


Square footage is, of course, a significant contributor to the cost our your self build, and with the help of your architect, it’s worthwhile finding clever ways to reduce the footprint but still get your wish-list. However, you will find that economies of scale come into play, so each additional square foot should cost slightly less than the previous one!


Open plan living is ever more popular in new homes, and with good reason. It brings in more natural light and provides a more pleasant living environment. However, substantial unobstructed spaces can be very costly due to the additional structure (usual steels in the ceiling) required. There are ways around this, like adding columns to reduce steel spans. These columns or structural walls will need to be carefully placed to ensure they have minimal impact on the flow of spaces/views. Again, this is where a good architect will come into their own!

Build only what you need 

It can be tempting to make your new home as grand as possible but don’t go for a 4-bedroom house when a 3-bedroom place can support you and your family just fine. Since building costs are based on the fixtures and rooms the house will have, you can cut costs by only planning your home around what you’ll need for the next couple of years. Most Aussies are downsizing their spaces with housing prices rising, even dropping below the average house size in square metres. 


It is entirely possible to get brand new items at deep discounts. For example, we got four brand new high-efficiency windows in their shrink wrap at a local builder’s surplus store. We paid roughly 30% of their retail price just because someone else had a disorder!

You can also save vast amounts of money on services by simply finding the right people and ASKING. We hired our excavator after lots of friends and family referred him to us, and the relationship we formed with him quickly saved us five figures. He’s been in excavation for decades and was always willing to share his expertise with us whenever we had questions. Not only that, but because we kept coming back to him, he was more than willing to work out deals with us. 



The right architect, who can help you find the best ways to plan and save, can prove to be worth their weight in gold! However, suppose you are still considering reducing your self-build costs by saving on professional fees. In that case, you might consider hiring your architect for the early design phases of the project and not engage them for the construction phase. As part of their quotation, they will split up their fee into the different stages of the job so you can even decide how much or little you will use them as you go!

Why Is it Essential We Have Cheap Homes to Build?

There need to be various options for the diverse demographics attempting to enter the real estate market. Whether it be first home buyers or those with many investment properties, cheap homes need to exist as a realistic alternative so that anyone can own and build a house.

Checking Your Budget

The second thing is that the home you want to construct has to fit in with your budget. The price will be much higher if the house is larger than the one you are considering.

Also, there are different types of homes for different kinds of people. If you are a young person, then you might want to look at one that is bigger than what you think is the cheapest type of house to build for a young person, but it will be much more expensive than the one that would fit in with your budget if you are elderly.

Once you have a list of these things to consider, you can compare the cheapest type of house to construct and then make an educated decision. There is no better way to save money than by knowing the most affordable type of home to build than learning the basics of what it takes to get it done.

It is entirely possible to build a home with natural materials for millions of dollars (like this cordwood home). It is also possible to make a very conventional house for little or even no money depending on how you source your materials. 

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