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How much does it really cost to build a house?

When building a custom home, many people only budget for construction costs (based on a square-metre rate). But you also need to consider design, consultants and site and external costs.

After you have purchased your land, you can calculate the cost to build your custom-designed home based on four components: home construction cost, site and external costs, design free, and the cost of design consultants. The equation looks like this:

project cost = home build + site & external costs + design + consultants 


Home Construction

The home construction cost is often calculated using a square-metre rate. This cost can itself be broken down into four components: size, selections, style/complexity, and shape. We’ve taken a close look at each of these in another blog post: Calculate the square-metre rate to build your home.

All too often people focus only on the home construction cost when they create a budget. However the other three elements represent significant outlays, and they can vary from one project to another depending on the specifics of the site. Below we’ll take a look at each of these so you can calculate the overall cost to build your custom home.

How much should I budget for home construction costs?

A per square metre allowance can range from $4,400-15,000 depending on the project cost model above (size, selections, style/complexity, and shape)

Obviously this can vary widely. However, a typical figure for a midrange custom designed home in Tasmania, with an area of 200m2, including three bedrooms, two bathrooms, a double-car garage and open-plan living, typically sits between $4,800 to $6,500 per square metre, ranging from $960,000-1,300,000.

Site and External Costs

Site and external costs include things like excavation, fencing, and constructing a driveway. These costs are specific to your site and project and will remain static even if you make changes to the building design.

In many cases, site and external costs will be included in your building contract, however, it’s a good idea to split them out from your home construction cost when developing your budget. This will allow you to make adjustments to your home design, and see how each change impacts on your project-specific square-metre rate.

For example, you may want to change the cladding on your home, and see how this affects your budget. By splitting out the site and external costs, which are mostly fixed, you can more easily recalculate the cost of your build.

We’ve taken a close look at the specifics of site and external costs in another blog post: Getting started with custom home design.

How much should I budget for site and external costs?

Budget for serviced block $20,000-60,000.

Budget for unserviced block $60,000-140,000.

“an architect provides a creative response to your brief, bringing their experience and expertise into play, however a building designer offers another option”

Design Costs

There are two options when it comes to designing your home. You can use an architect or a building designer. One of the main differences between the two is time. An architect allows a lot more time to think, consider your home and resolve design decisions and details.

An architect has a high level of professional training. His or her role is to collect information from you (a brief) and use that information to design a building. Typically, an architect provides a creative response to your brief, bringing their experience and expertise into play.

A building designer has the credentials to design and draft building plans, but will usually provide less input at the conceptual level. He or she will draft up your own design ideas, rather than creatively interpreting the brief. You’re likely to get a less adventurous and less technically complex design if you use a building designer.

No matter which option you choose, design fees are affected by the complexity and detail of the design. Two-storey houses, for example, are more complex to design and engineer than single-storey houses, as are homes designed for steep sites.

How much should I budget for design fees?

Traditional high-end architects charge around 12% of the project fee, for example, $115,200 for a $960,000 build. This is based on the build cost at contract value, meaning if your starting budget was 1 million and your build contract is 1.5 million your 12% design fee will be based on 1.5 million. At the other end of the spectrum, a building designer will usually charge around $10,000 to draft your design ideas, though this will not include interior selections or creative input. A building designer typically offer a much lower level of service.

At Align we provide a fixed design fee, with architectural design fees starting from $60,000 and interior design fees starting from $19,800 (based on a $960,000 build cost)

Design Consultants

There are many different design consultants who may need to contribute to your construction plans, and they will vary depending on your individual situation.

Some design consultants will be included in the fees for your architect or builder, but you need to confirm this when you’re contracting them. If the design consultants are not included, it’s a good idea to ask your architect or builder to recommend consultants – very often they will have negotiated discounted rates that they can pass on to you. Also, it will work to your advantage if there’s already a working relationship between your specialists and your builder and architect.

“it will work to your advantage if there’s already a working relationship between your specialists and your builder and architect”

Here is a checklist of design consultant you may need:

  • Site surveyor A site surveyor will record the contours of the land, check the boundaries and mark the location of the sewerage point, the stormwater point, the phone connection, the power connection, and any other features of the block, such as fences or existing buildings.
  • Site classification The site classification details the wind speed for the block and the soil tester checks the composition of the soil on your block, which will affect the kind of bracing, tie-downs and footings that can be used.
  • Waste water assessment If you are building on an unserviced block you will need a wastewater system. This must be designed by an accredited wastewater designer. For an unserviced block it will be cheaper to ask for a combination of a site classification and wastewater design, as the same consultant will be able to do both on one site visit. Some consultants don't do both, so choose one that can do both reports.
  • Bushfire assessment If your block is in a bush area you may need an accredited specialist to assess your bushfire attack level (referred to as your BAL rating) and, if necessary, prepare a bushfire management report. This will detail the actions to take in the event of a bushfire and any preparation requirements, such as constructing overpassing bays on your road.
  • Stormwater assessment If your block does not have a stormwater connection, you will need a stormwater assessment to detail how water will run off your roof and stay within your boundary. Usually this will require the construction of a water tank, with overflow fed into a soakage drain in the ground.
  • Energy rating You must obtain an energy rating for your home from an accredited specialist. An energy assessment may be completed by an architect or a building designer (who is an accredited energy assessor) or an independent accredited energy assessor. Read more: Sustainable House Design.
  • Building surveyor (or certifier) Once all the documentation has been developed from all design consultants, and the engineering and the architectural plans are ready, the building surveyor checks and certifies all the documentation before it is submitted to council, and carries out building inspections during construction.
  • Plumbing inspector The plumbing inspector checks the plumbing permit details against the plumbing installed on the site.

How much should I budget for design consultants?

Average budget for design consultants: $15,000-28,000 (Depending on consultants required for your site)

Home Construction Cost Quick Guide

To summarise, you must keep in mind:

  • Budgeting for a custom home build involves more than just the construction cost estimate.
  • The home build cost depends on the four components:
    • Design Architect design fees
      High-end architect: 12% of project cost
      Building designer: $10,000
      Align design fees: $60,000 (based on $960k build cost)
      Interior design fees: $19,8000 (based on $960k build cost)
    • Consultants Design specialists
      Average consultant costs: $15,000-28,000
    • Site & external Site development and infrastructure costs:
      Serviced block: $20,000-60,000
      Unserviced block: $60,000-140,000.
    • Home construction build cost
      Per square metre: $4,000-15,000.
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