Construction Costs Per Square Metre
What are construction costs and why are they important?
If you are building a new home, or investing in the construction of a commercial or industrial property, it’s important to have an idea from the very start how much it may cost. It can help you negotiate with developers, and ensure you don’t pay too much. It can also give you an indication of how much you will need to borrow, before heading down the track of formally applying for a loan.
What information can I learn from a construction costs table?
Construction cost tables such as the ones on this page are a good place to start when you are considering building. They generally highlight the construction costs of a range of property types and, when you choose the nearest capital city, quality of build and size of the property, will present you with an indicative cost. It is important to realise these figures are purely a guide, and it is always a good idea to get independent detailed advice before committing.
Our building cost table will give you information for the most popular kinds of developments, including
How much does it cost to build a house?
:
- Shelf, unique and architecturally designed homes
- Townhouses
- Units
- Commercial developments
- Industrial developments
- Retail developments
- Hotels and motels
How much does it cost to build a house?
Building a new home can be both exciting and daunting. While the chance to build the home you love from the ground up is attractive, the organisation and management involved in bringing everything together just the way you want it can be stressful. At the end of the day, the biggest influence on most of your home building decisions is cost.
| Construction Type | Level of Finish | ||
| House | Low | Medium | High |
| 3br brick veneer project home, level block, single level, shelf design | $1,065 | $1,270 | $1,630 |
| 3br full brick project home, level block, single level, shelf design | $1,090 | $1,305 | $1,670 |
| 4br brick veneer home, level block, single level, unique design | $1,570 | $1,750 | $1,950 |
| 4br full brick home, level block, single level, unique design | $1,640 | $1,810 | $2,010 |
| 3br brick veneer project home, level block, two level, shelf design | $1,110 | $1,310 | $1,710 |
| 3br full brick project home, level block, two level, shelf design | $1,130 | $1,400 | $1,790 |
| 4br brick veneer home, level block, two level, unique design | $1,700 | $1,900 | $2,050 |
| 4br full brick home, level block, two level, unique design | $1,780 | $1,970 | $2,250 |
| Architecturally designed executive residence | $2,160 | $3,250 | $5,050 |
The above rates are exclusive of GST.
What is a house and land package?
Homes packaged with the land they’re to be built on are called house and land packages. Most house and land packages in Australia are sold by developers, and there are two main kinds of options: buy the land before the house is built; or buy the house built on the developer’s land. Buying a house and land package is one of the most affordable ways to buy a home in Australia.
| Size of Australian Housing Industry (a) | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| Number of detached house starts | 94,828 | 91,297 | 98,596 | 116,058 | 115,869 | 117,477 | 114,087 |
| Number of units started | 59,461 | 60,544 | 70,772 | 85,903 | 108,365 | 113,605 | 99,087 |
| Total number of dwelling starts | 155,375 | 153,583 | 171,598 | 203,838 | 226,857 | 233,559 | 214,875 |
Will I have to pay stamp duty on house and land packages?
When you buy a house and land package you generally only have to pay stamp duty on the price you pay for the land, not on the home you intend to build. The amount of stamp duty you will pay depends on which state or territory you live in. And it may depend on whether you live in a capital city or a regional area. You may even pay less stamp duty if you are buying a house for the first time, as governments sometimes attempt to stimulate local economies through home construction.
Stamp Duty Calculator
How much does it cost to build a townhouse?
Townhouses can be more expensive to build per square metre than traditional houses, given they are not as common, and still require a lot of specialised work. That can be quite surprising, given they usually have fewer bedrooms than a traditional house.
| Construction Type | Level of Finish | ||
| Townhouse | |||
| 2br, single level brick veneer townhouse, including allowance for common property | $1,250 | $1,490 | $1,740 |
| 2br, 2 level brick veneer townhouse, including allowance for common property | $1,350 | $1,580 | $1,900 |
| 3br, single level brick veneer townhouse, including allowance for common property | $1,235 | $1,475 | $1,725 |
| 3br, 2 level brick veneer townhouse, including allowance for common property | $1,340 | $1,610 | $2,270 |
The above rates are exclusive of GST.
What about the cost of a large investment or commercial property?
Research is important if you are buying any kind of real estate. At Mortgage House we want our customers to be armed with as much information and as many resources as possible before they take the plunge. Investing in building a large residential or a commercial property can come with more risk than building a regular residential home, so making an informed decision is vital. Having cost estimates of how much it it will cost to build these kinds of developments is a key piece of information. and what the average costs are in different postcodes is also important.
Given the minimal amount of fixtures and features, building a warehouse or industrial development can cost a lot less per square metre than an office development or group of units. However, with lots of bathrooms, hallways and smaller individual rooms, building hotels or motel build costs can be a lot more expensive so it is important to have some sort of cost guide.
| Units | |||
| 3 level walk-up unit complex, concrete structure, ground floor parking | $1,650 | $1,820 | $2,320 |
| 3 level walk-up unit complex, concrete structure, basement parking | $1,615 | $1,785 | $2,285 |
| 4-8 level walk-up unit complex, concrete structure, ground floor parking | $1,720 | $1,950 | $2,650 |
| 4-8 level walk-up unit complex, concrete structure, basement parking | $1,650 | $1,920 | $2,615 |
| 8 or more level unit complex, including lift and basement car parking | $1,710 | $2,280 | $3,030 |
| Commercial | |||
| 1-4 level open plan offices, including A/C & lifts, excluding fit out | $1,480 | $1,760 | $2,290 |
| 4-8 level open plan offices, including A/C & lifts, excluding fit out | $1,620 | $1,850 | $2,400 |
| 8 levels and over, including A/C & lifts, excluding fit out | $1,880 | $2,064 | $2,770 |
| Industrial | |||
| High Bay Warehouse, standard config, concrete floor, metal clad | $810 | $885 | $980 |
| High Bay Warehouse, standard config, concrete floor, pre-cast concrete wall clad | $1,050 | $1,110 | $1,20 |
| Retail | |||
| Suburban shopping mall area including A/C | $1,590 | $1,810 | $2,100 |
| Supermarket, including A/C, excluding fit out | $1,380 | $1,500 | $1,670 |
| Hotels/Motels | |||
| Single level boutique motel, including A/C, guest facilities | $2,650 | $3,200 | $4,500 |
| Single level tavern/hotel, including A/C, excluding loose item fit out | $1,980 | $2,350 | $2,650 |
The above rates are exclusive of GST.
Are construction costs the same around Australia?
Simply put, no. There are a lot of regional variations to the square-metre cost of building either a residential, commercial or industrial property. To get an idea of how much it may cost in your area whether it be Perth, Melbourne or even Hobart, use this regional variation table courtesy of BMT Quantity Surveyors.
| Regional Variations | |
| Cairns | 115 – 130% |
| Brisbane | 105 – 115% |
| Sydney | 100% |
| Canberra | 96 – 104% |
| Melbourne | 98 – 108% |
| Hobart | 87 – 97% |
| Adelaide | 98 – 110% |
| Perth | 100 – 120% |
| Darwin | 110 – 120% |
If your development is not located in Sydney, you can still estimate the construction cost of a development by applying a regional variation percentage. Simply multiply the construction cost by the regional variation percentage. This will give you an approximate cost for the construction type per square metre in your area. Mortgage House would like to thank BMT Quantity Surveyors for providing this information.
Apart from geography, what other factors can impact construction costs?
Size of the home: If you are building a house, size does matter, but maybe not in ways that you think. Double-storey homes usually increase the square-metre costs (sqm), because of features such as staircases and extra tradie materials such as scaffolding. An increase in size from four to five bedrooms doesn’t usually result in a large jump in the square metre cost of construction, given most four-bedroom new homes are usually built with a study or minor other room. There is, however, generally an increase in the square-metre cost of building a four-bedroom new house compared to a three-bedroom home. This can mostly be put down to the fact that the extra bedroom usually comes with an extra bathroom and an extra living space.
Finishes: The quality of finishes and fixtures can make a big difference in the cost per square metre of constructing a property. Full brick homes tend to cost more than brick veneer, and obviously the quality of materials used both inside and outside can have a big influence.
Location:Â Each state and territory has its own taxes and fees, and tradies from different states can also have different levels of compliance costs.
The cost of land: If demand for land is high in some suburbs, costs can escalate. Also, if the land itself is difficult to build on, construction costs can increase.
What finance options are available when I am constructing a property?
Construction Loans: If you are building a house, or even renovating, then a construction can be a great way to save on interest.
Property Development Finance: Your needs as a property developer will be quite different depending on your experience level and the type of property you’re looking to build. Whether your next property development project is a multi-dwelling apartment or a skyscraper, we have the right loan to build it.
How does a construction loan work?
A construction loan is a mortgage that is tailored to someone who is building a house or undertaking a large renovation. Construction loans are similar to regular fixed and variable mortgages and can be either. However, there is one main difference and it is a difference that can save you money. A construction home loan will work within an agreed timetable, and will make payments to your builder when construction stages have been met. The benefit to you is that interest will only be charged on the amount that has been paid out. Once the home has been completed, and you have 24 months for the house to be built, a construction home loan will revert to a standard mortgage, with regular principal and interest repayments.
How can I find a good builder?
Finding a builder you trust for a price you want can be invaluable. Make sure you do your homework before choosing a house and land package from a developer or an independent home builder, no matter how big or small they are. Think about the following:
- What experience have they got and how long have they been in business?
- How many homes have they sold?
- Get referrals, and ask the owners if they were satisfied with the workmanship.
- Check on appropriate builder’s warranty and insurance cover.
- Check if they offer a fixed price building contract, so you aren’t left with unexpected fees.
If you choose to build a home with one of the big developers, make sure you visit their display villages:
- Walk through their display homes to compare designs and costs, along with workmanship and quality of materials.
- Pay attention to the detail and finish of the home, such as painting, carpentry and tiling to check whether they are of a high quality.
- Would you like to change a particular aspect of the house? Find out the extra costs involved and compare these with the price of the original design.
- Ensure that all features, services and materials are listed in the contract, such as letterbox, driveway, clothes line, flooring etc.