Cost Breakdown of Building a New House in Australia 2025

Thinking of building a new house in Australia? A journey full of choices, from the layout of the living room to the type of tiles in the bathroom. But along with these exciting moments, there’s also a constant worry of expenses.

“How much does it cost to construct a house? What can I effectively manage these expenses? Is it better to construct custom or buy house already built?” A lot of questions are there. After all, nobody wants to commit to a project & find out halfway that budget is blown.

At PDCD Homes, we know that knowledge is the key to confidence. We’re a team of dedicated home builders based in Perth, and we’re committed to helping you understand every cost involved in building a new home.

Let’s answer all your questions about building a house in Australia. So, you can start your journey with your eyes wide open and dreams within reach.

The Costs of Building a New House in Australia

So, how much does it actually cost to build a house in Australia?

The truth is, it’s not a one-size-fits-all number. On average, the cost to build a new house range from $1,000 to $5,000 per square metre. It means a family home of around 200 square metres could cost anywhere from $300,000 to $600,000 to build.

The rate is also affected by location, land type, accessibility & state laws. E.g. cost to build a house in Perth ranges from $1,900 to $3,700 per square metre.

A rough estimate of major Australian states in 2025 is given as:

Source: Australian Bureau of Statistics Release 2025

Please note that these are baselines numbers for the most basic designs (construction only) with no add-ons or finishes. Your design choices, the location, building scenario and the level of finish can add up further.

Building a New House Cost Breakdown

Now let’s explain the components which contribute to the construction cost. Keep all of them in mind for making an effective & thought-out budget.

1. Labour Fees

Labour costs are one of the biggest parts of your total budget. It includes the wages for everyone involved in the build: carpenters, plumbers, electricians, bricklayers, tilers, and more.

In places like Perth, these rates are a bit lower than big cities, but they’re still a major factor. Always experienced & efficient custom home builders because delays and mistakes can end up costing you more in the long run.

2. Material Costs

The materials you choose make a huge difference to your bottom line. From the frame of the house to the tiles in the bathroom, every choice affects the final bill.

Basic materials are obviously more affordable. But if you have your heart set on premium finishes, be prepared for your costs to rise. Also, don’t compromise quality for expense.

3. Interest on Loans

If you’re financing your build with a construction loan, remember to include the cost of interest. Construction loans work differently than standard home loans.

They release money in stages, which means you only pay interest on what you’ve drawn down. Still, this interest can add thousands to your total spend. Plan for these payments from the start to avoid financial headaches later on.

4. Supplies & Equipment

Building a house isn’t just about materials and labour. There are costs for machinery, scaffolding, safety equipment, and more.

These smaller details are not the first things you think about. But they’re essential to the build & add up quickly. Make sure these costs are included in your budget right from the start.

5. Surprise Expenses

No matter how well you plan, there are always things you can’t predict. The soil on your block can require extra work, or an extra deck can be needed at the last minute. Adding several dollars to the built house cost.

Not to mention the sudden hike in material prices. That’s why we always recommend setting aside a contingency of at least 10% of your budget to cover any unexpected costs.

Different Scenarios of Building a New House

Now let’s have a look at the different scenarios of building in Australia. Your total expense will vary according to the scenario. So, read carefully.

• Building on an Empty Site
  Starting from scratch on a clean block is the most straightforward and the most cost-effective option. With no old structures to demolish, you save a lot of money right out of the gate.
• Demolishing & Rebuilding
  If you’re knocking down an old house to make way for your new build, you’ll need to factor in demolition costs. Depending on the size of the house and what’s on the land, it can add $15,000 to $50,000 or more to your budget.
• Buying a Plot to Build
  If you’re starting fresh and need to buy land, remember that you’re not just paying for the plot. You’ll also need to cover stamp duty, legal fees, and costs to prepare the site. Means a significant chunk to your overall budget.

Factors on Which Cost to Build a House Depends

Need more personalised estimate? Browse the list of all the contributing factors and adjust them to set your budget. Think if this list as your cost of building a house calculator Australia.

1. Location

The location of your build has a massive impact on your total costs. E.g. In Perth, the price of land and council fees are higher than in more regional or outer suburbs.

Access to services and infrastructure can also add to these costs. The more facilities you can avail nearby, the more expenses of construction are there. So, balance your location preference with your budget to choose a suitable spot.

2. Size of Home

The bigger the house, the bigger the cost, it’s as simple as that. Even adding an extra bedroom can add tens of thousands of dollars to your final bill. Consult builders of houses to get ideas about effective usage of space.

Be realistic about how much space you really need, it’ll help keep your costs down.

3. Government Grants

One of the best ways to reduce the costs of building is to see if you’re eligible for any government grants or incentives.

They can make a huge difference, especially for first-home buyers. We help our clients explore these options because saving money upfront leave space for more design choice.

4. Design Elements

It’s tempting to go all out on the design of your new home. Get a lavish exterior, lay in premium tiles and fancy lighting. But it’s the biggest factor in blowing your budget.

Custom finishes, high-end appliances & architectural features add a lot to your build cost. Get help from the experts to figure out what design elements to choose for your budget.

5. Timeframe

Delays are more than just an inconvenience, they’re expensive.

The longer your build takes, the more you’ll pay in rent, interest, and possibly even extra labour. While on the other hand, making too haste can also double or triple the labour costs. So, make a balancing decision.

Tips to Manage Expenses Without Compromise on Quality

Check out some tips we gathered from our experience of building. They’ll help you further in deciding your budget.

Read More at: How To Plan Budget for Building a Luxury Custom Home?

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At PDCD Homes, we create spaces that suit your lifestyle & your budget. We understand that building a home is a big investment, and we’ll help you make the most of every dollar.

Our experienced team will guide you through every step, from choosing the perfect block to handing over the keys. There’ll be honesty, transparency & no surprises. From day one, you’ll know exactly what to expect & how to keep your project on track.

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