The Cost of Building a Custom Home: What You Need to Know
Buying a new house is an exciting time. However, you’ve probably noticed that when it comes to choosing your new home, there are a number of options available. Do you buy an existing property or purchase a house and land package from a volume builder? With so many products available, it can seem like you’ve got your work cut out for you!
One of the best options to consider is custom homes. Building a custom home allows you to be in control of the whole project and expenses. From the location, floor plan and construction materials to the type of finishes and fixtures, you will make the decisions that suit your budget as well as your lifestyle. Reputable new home builders will also provide bespoke advice on construction costs and the factors that may affect it.
By understanding the factors that influence the building costs of your dream home, you will be able to make an informed decision and move forward.
What is a custom built home?
Custom homes offer a unique house design in a specific location. They are bespoke houses that are built with the owners’ design preferences in mind. In a nutshell, you get exactly what you want and everything is controlled by you and built by a well-researched custom builder of your choice.
How much does it cost to build a custom home?
You can then budget your money and negotiate the finances required. However, building a boutique home is not the same as buying a car or any other consumer item.
There are multiple factors that impact the final cost of a newly built home. For this reason, it is challenging to estimate the price of all the expenses accurately before on site construction begins.
In April 2022, data from the ABS revealed that the average cost of building a home nationally was $473,000. This, however, could be higher or lower depending on the location of the custom built home, fees associated with site permits and consultants such as an architect, landscaping costs, quality of finishes and fixtures and even the impact of Covid on suppliers and materials. Prices also range greatly when getting quotes from various custom home builders.
10 Factors that affect the cost of a custom-built home
There is certainly a level of complexity and a number of variables when looking at construction costs. Let’s breakdown the factors that affect the cost of a custom built home.
As you read on, it’s worthwhile remembering that with new builds, you have the power to control most of these elements.
A reputable boutique home builder will also partner with you to help minimise building costs, rather than thinking solely about their own profit or loss. They can also provide advice on how to allocate money to another area of the project to optimise some of your budget.
1. Site location
Where you decide to build your custom home will have a considerable impact on the home cost. A site that has easy access to utilities and services such as electricity and water and has a minimal slope with favourable topography will lower your expenses. Site inspections by a professional will go a long way in avoiding loss of money. Where you live will also have an impact. Projects in Sydney or Melbourne may require a different investment than in regional areas.
2. Size of your home
Figures reported by Commsec state that the size of the average Australian home is 195.8sqm and sits on a 470sqm block of land. Custom built homes, however, are becoming larger and have grown in size by over 230sqm in floor area. Bear in mind that a larger dwelling with extra bedrooms, a basement or an extra space requires more equipment, material and workers.
3. Design factors
Pay attention to the complexity of your plans and the design blueprints. Are there high ceilings, multiple levels or irregular shapes? What are the specifications of each room and the roof? Are there any costly features in the layout? All these things can contribute to your final margin. Factor all these items as part of your budgeting.
The construction industry has been affected by supply chain cost issues, resulting in higher site costs. Work closely with your custom home builder to find items that are readily available. For example, you could be flexible with your choices and use timber framing, which is cheaper and readily available, or you could use less steel. Work with materials that correlate to your budget to reduce your build cost.
5. Finishes and fixtures
We all have different perspectives on the quality of finishes and fixtures, including lighting, carpets, cornices, doors and windows. Do you require specialised labour or tools to complete a unique feature and is it really a necessity for that space? There are so many choices when it comes to finishes and fixtures, so it’s easy to get the right quality and detail that matches your budget.
6. Consultant fees and building permits
It’s in your best interest to shop around when engaging an architect, town planner, or other building professional. Prices people charge in the construction industry range greatly and taking into account these overhead costs may save you money. Homeowners have limited power when it comes to council fees. However, architects and builders can work with you to ensure your design meets the requirements of your local government.
The majority of homeowners often forget to factor in fittings such as white goods, appliances, curtains and the like. These all add style and comfort. Ensure you budget for these items as well as the labour associated with getting these to your place.
Even though there is so much emphasis on the structure and foundations of your home, it’s wise to include landscaping in the process of building and your budget. The design of your garden and land will affect your budget. Moreover, consider the amount of soil that may need to be removed to begin site works.
9. Changes in timeframes
Even with the tightest plans in place for your project, there will be instances when certain fixtures, building materials or equipment are delayed. This could be due to logistics delays or inclement weather. Planning for these extra charges is a good idea. Leave 10-15% of the construction costs aside as a contingency.
10. Finances and government
Although not directly linked to construction costs, interest rate rises influenced by government policies may affect your bottom line when building your custom home. If you have a home or construction loan, take time to get as much information on the flexibility of your repayment options. Whether it’s Labor or Liberal in the picture, it’s inevitable that their decisions will also have an effect on your construction costs. Your custom home builder should have knowledge of your state’s most current codes and regulations.
There are a number of ways to navigate these factors. Your custom home builder can break down the building costs and provide a of things to consider.
Answers to your most popular questions about custom home costs
We have collated some of the most common custom home building questions and the costs involved below.
What is the cost per square metre to build a custom home?
To ensure builders offer a fair and precise contract price, you will notice that their quote is dependent on the size of the house. Builders will utilise a per square metre (m2) value to price their construction projects. This provides a good starting point where homeowners can adequately compare quotes.
In Australia, you would pay approximately $1,300 per square metre for a 3 bedroom house on a level block with minimal inclusions and basic materials. Alternatively, you would expect to pay up to $3,900 per square metre for a 4 bedroom, two-level designer house containing premium fixtures and finishes.
It’s important to note that depending on your specific needs, quoted contracts may vary from the above range of prices.
How much will it cost to build a custom home on my lot?
Given there are so many factors that can affect the cost of building a new home, each clients’ project will need to be assessed individually. Your construction team will need to view the lot in the first instance in order to price accurately.
As mentioned earlier in this article, there are so many parts of the construction that need to be factored in. From the type of construction (for example, timber is cheaper than double brick), the number of levels (as multi-levels cost more), choice of materials, site access, the slope of your lot and the pricing structure of the builder.
How much will it cost to customise my home plan?
It’s difficult to say how much it would cost to customise a home plan. After all, it depends on the specification and modifications of your plans. Basic changes such as paint colour or tile alterations usually have a minimal cost. Significant changes to the designs of fixtures may involve a customisation expense.
Alterations to things such as layout, room sizes, or larger sections of the house and facades will attract the most significant cost figure. These costs are usually itemised for the client.
What is the cost of building materials for a custom home?
Covid, inflation and supply issues have had an adverse effect on the cost of building materials in Australia.
From steel, bricks and different types of floors to concrete, glass and timber, prices are soaring. However, it’s not all doom and gloom. An established new home builder will have a strong relationship with a wider net of suppliers and can still achieve the best price for your design selections.
How much does it cost to hire a custom home builder?
There is a fundamental difference between hiring a custom bespoke home builder rather than the general production home builder. With a custom home builder you will have the freedom and control to make your own choices within the realms of your own budget. You will also benefit from a far more personalised service and a tailor-made approach to building your home.
Given the individuality of this service, there is no set price. You will partner with your new home builder to achieve the best outcomes from concept to completion.
How much does it cost to get a custom home loan?
There are a variety of construction loans offered by the major banks as well as smaller financial institutions. They each have their own fees and interest rates currently range from 3.99% to 7.89% depending on the provider.
Most are funded through a series of progress payments and there is also the availability of interest-only payments during the construction period. Take time to compare and discuss your project with a number of different institutions to get the best deal.
Ready to build your bespoke home design?
Many believe that building a custom home is reserved for a select few, or costs significantly more than other dwelling options. However, this is a big misconception. A custom home will offer you the opportunity to build your brand new house on your terms and within your budget.
In fact, you can take advantage of high quality materials, greater attention to detail and individualised service. It’s no wonder why custom and boutique homes are on the rise.
The team at New South Homes are proud to have developed a reputation as the builders of choice for custom homes. With over 35 years of industry experience, you will benefit from our expertise, integrity and wide network of contacts in the industry. We look forward to providing you with the ultimate customer service experience. Get in touch and discuss your bespoke home design with us today.
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