Cost of Building a House in Sydney

May 25, 2023
Cost of Building a House in Sydney

Many folks making the move to Sydney are now choosing to forego finding homes for sale in Sydney and opting to build their own unique house instead. According to the Australian Bureau of Statistics (ABS), the average cost of buying a house over the last fifteen years has been around $320,000.

These cost also likely increased due to supply chain issues and the high construction costs caused by the COVID-19 pandemic. So much so that in 2022, ABS reported that the average cost of building a house in was $473,000. This refers to building a house in Australia in general. From the size of the house and cost of the land on which it’s built to its location, fixtures, and finishes, many factors affect the cost of building a house in Sydney.

Now, in 2023, the ABS has stated that in the February quarter, the costs to build a house in Sydney are around $504,808 on average. Surprisingly, Sydney was the only city where house building costs did not witness growth and yet, it remains the most expensive city in which to build a house. Let’s uncover where the spending goes.

What’s the Cost of Land in Sydney?

The first thing you should consider when determining how much it costs to build a home in Sydney is the cost of the land you’ll build the house on, which varies significantly across Australia. In 2020, the Urban Development Institute of Australia reported that in Sydney, the cost of land was $495,000. In Adelaide, it was $183,460, and in Melbourne, it was $319,000. 

The average cost of buying land in Sydney, Australia, is $1285 per square metre, $400 per square metre in Adelaide, and in Melbourne, it’s $819 per square metre. 

What’s the Cost of Building a House in Sydney?

Cost of Building a House in Sydney

Although many factors influence the cost of building a house, including site, location, design, and finishes, Hipages estimates the cost of building a home in 2022 ranges between $1300 and $3900 per square metre. However, that figure excludes planning permits, design, site works, and blow-outs costs. 

The ABS reports that the average house in Australia occupies 248 square metres, putting the average cost of building a home at $322,400. 

What Factors Influence the Cost of Building a House?

Four key factors influence the cost of building a home in Australia:

1. Size of the House

A report by Commsec estimates the average house in Australia is 195.8 square metres, sits on 470 square metres of land, and has three bedrooms. However, the size of new builds is considerably larger at around 235.8 square metres, meaning that people in Australia are now building bigger houses.

A larger home with many bedrooms will require more materials, specialised equipment, and labour, increasing the construction cost.

2. Quality

Cost of Building a House in Sydney

Often, everyone’s idea of quality is different, so you must reach an agreement with your builder concerning the finishes and fixtures you want. Although high-quality materials result in better craftsmanship and finishing, which increases the cost of building a house, the reverse could also be costly.

By choosing cheap and low-quality materials, the ultimate construction cost may increase because you’ll likely have to pay for replacements and repairs later on.

3. Timeframes

Timeframes also influence the resources needed for a build. Amid supply chain problems, budgets and timeframes are being stretched because of shortages in materials across the country. When there are delays in materials, your entire project stalls, which means you’ll pay more in accommodation and holding costs.

Further, your builder will divert their team of tradespeople to work on other construction sites, which means it’ll be challenging to get your project to align again.

4. Site Considerations

Cost of Building a House in Sydney

Site is a crucial factor that your builder or architect has to manage–often with the assistance of an engineer when necessary–and the cost will be out of your control.

If you need to reduce the cost of building a home, trading off on the quality of the foundation is a bad idea because you can always refurbish your floors and doors in the future, but you can’t refurbish the concrete slab. The location of the house can also affect the cost of building a home due to planning overlays and council requirements.

5. Design Complexity

A simpler construction project is less costly and takes less time to complete, while more complicated designs are expensive and take longer to complete. Budget and timeframe blow-outs are expected when building houses and are often caused by changes to the original plan.

If you’re building your home with a volume builder, it’s cheaper to stick with the standard inclusions.

Remember, if you opt to update the existing inclusions, including adding more insulation, storage, or luxury flooring, this will increase the cost of building your house.

The average cost of building a house in Sydney in 2022 is around $473,000; however, that cost may increase depending on land cost, house size, quality of the house, and overall complexity.

Not interested in building and looking for details on the process of buying a house in Sydney or the cost of a buyer’s agent in Sydney? We’ve got you covered–check out our latest articles.

Costs of Building Your Own Home

Building your own home provides a great opportunity for customization but also comes with various costs to consider. Apart from the land cost and house size, several factors influence the overall expenses of building a house in Sydney.

1. Design and Architectural Services

Before construction begins, you may need to hire an architect or designer to create plans and blueprints for your dream home. The cost of these services can range from a few thousand dollars to tens of thousands, depending on the complexity of the design and the professional you choose. It is essential to allocate a portion of your budget for these services.

2. Building Permits and Approvals

Obtaining necessary permits and approvals from local authorities is a crucial step in the construction process. You will likely need to pay application fees and may require the assistance of a building surveyor or consultant to ensure compliance with regulations. The cost of permits and approvals can vary but is typically a few thousand dollars.

3. Construction Materials and Labor

The materials used and the labor employed during construction significantly impact the overall cost. Factors such as the quality of materials, finishes, and fixtures can vary widely in price.

To accurately estimate the construction cost and evaluate builder hourly rates, it is recommended to consult with reputable home builders in Sydney who can provide detailed pricing information based on your desired specifications.

Costs of Building a 3-Bedroom House

Cost of Building a House in Sydney

For those planning to build a 3-bedroom house, the costs will be slightly higher compared to a 2-bedroom house due to the increased size and complexity. In the same way, the costs of building a duplex in Sydney will be higher than a one-level house.

A 3-bedroom house typically requires more materials and labor, resulting in a higher overall construction cost. On average, here are the costs of building a 3-bedroom house in Sydney may range from:

  • 3-bedroom weatherboard house on a level block, utilizing budget materials, is approximately $1300 per square metre.
  • 3-bedroom full brick single-level project home, also on a level block, with mid-range to high-end materials and finishes, the cost ranges from $1600 to $1900 per square metre.

Costs of Building a 4-Bedroom House

  • The cost of constructing a 4-bedroom single-level brick veneer home on a level block, utilizing budget materials, is approximately $1,900 per square metre.
  • For a 4-bedroom brick veneer single-level project home on a level block, incorporating mid-range finishes, the estimated cost is around $2,400 per square metre.
  • Building a 4-bedroom full brick two-level home on a level block with top-quality finishes carries an average cost of $2,900 per square metre.
  • If you opt for an architect-designed 4-bedroom full brick, two-level home on a level block with top-quality finishes, the cost is $3,900 or more per square metre.

Final Word on the Cost of Building a House in Sydney

Building a house in Sydney offers the opportunity to create a custom home tailored to your preferences. However, it is important to carefully consider the costs involved to ensure your project stays within budget. Factors such as design and architectural services, permits and approvals, construction materials, and labor contribute to the overall expenses.

When building a 2-bedroom or 3-bedroom house, additional considerations such as size and complexity should be taken into account. By consulting with reputable home builders and carefully planning your project, you can achieve your dream home while managing costs effectively.

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