Building your dream home in Melbourne offers a unique opportunity to tailor your living space to your exact preferences.
However, understanding the cost to build a house in Melbourne is crucial to planning your project. In recent years, Melbourne has seen fluctuating construction costs, largely influenced by global supply chain issues and market changes.
Melbourne’s Property Market Update
Melbourne’s property market has faced ups and downs over the past few years.
In 2023, construction costs in Victoria saw a 0.9% increase in the first quarter, a slight decrease from the previous quarter’s 1.1%. Despite this, the annual increase in construction costs rose to 3.1% by March 2024, reflecting ongoing challenges in the construction industry.
Melbourne was the only capital city in Australia to experience a drop in dwelling values over the last three months to March, falling by -0.2%. In the same period, regional Victoria saw a decrease of -0.3% in dwelling values.
As of March 2024, the median house value in Melbourne stands at $935,049, while the median unit value is $612,906. In regional Victoria, the median house value is $600,870, and the median unit value is $411,236.
Naturally, the cost of land in Melbourne will be higher because it’s a capital city, whereas you might be able to find cheap land for sale in Victoria in rural regions. But you can still try and find cheap land for sale in Melbourne if you’re on a budget.
For more insights on Melbourne’s property market trends, check out this detailed analysis on Melbourne house price growth in the last ten years.
Average House Building Costs in Melbourne
Understanding the average house building costs in Melbourne is vital for budgeting your project. The cost to build varies significantly based on factors like the house size, quality of materials, and the complexity of the design.
In Melbourne, the cost per square metre ranges from a low of $2,000 to a high of $4,300.
Here’s a quick breakdown:
| Construction Type | Level of Finish: Low | Level of Finish: Medium | Level of Finish: High |
|---|---|---|---|
| 3BR Weatherboard Project Home | $1,817 | $2,034 | $2,516 |
| 3BR Brick Veneer Project Home | $1,936 | $2,157 | $2,576 |
| 3BR Full Brick Project Home | $2,012 | $2,235 | $2,794 |
| 4BR Weatherboard Home | $2,551 | $2,726 | $3,402 |
| 4BR Brick Veneer Home | $2,711 | $2,839 | $3,573 |
| 4BR Full Brick Home | $3,032 | $3,464 | $3,817 |
| Architecturally Designed Executive Residence | $4,157 | $5,322 | $7,444 |
Building a new house requires careful consideration of several cost factors. It’s not just about the initial cost projections but also the ongoing expenses associated with higher quality materials and finishes.
Factors Affecting Building Costs in Melbourne
Building a house in Melbourne involves several key factors that influence the overall cost. Here are the most significant factors to consider:
Size of the Build
The size of your house is one of the most significant factors affecting the building costs. The average size of Australian homes is around 200 square metres, but new builds often start larger, averaging 240 square metres.
A larger build requires more materials and labour, driving up the construction costs. For a detailed overview of house sizes in Melbourne, check out this article on the average house size in Melbourne and across Australia.
Quality of Materials
Choosing between budget materials and higher quality materials can significantly impact your home building costs.
While opting for cheaper materials might save money upfront, they often lead to higher maintenance and replacement costs in the long run.
Conversely, investing in high-quality materials ensures durability and better finishes, although it increases the initial cost projections.
Design Complexity
Complex architectural designs typically come with higher construction costs. Features such as split levels, open plans, and unique architectural elements require more expertise and materials, thus increasing the overall building costs.
Site Preparation and Conditions
The condition of your building site also plays a crucial role. Factors like soil quality, slope of the land, and whether the area is flood-prone can add to the site costs.
For example, building on a level block is generally cheaper than constructing on a sloped site, which might require additional foundations and retaining walls.
For more information on finding affordable land in Melbourne, read about cheap land for sale in Melbourne.
Specific Costs of Building Different Types of Houses in Melbourne
When considering building a house in Melbourne, it’s helpful to know the average costs associated with different types of houses.
Here’s a detailed look at the costs based on house size and materials used according to propertyupdate:
3-Bedroom House
- Budget Materials: For a 3-bedroom weatherboard house on a level block, the cost is around $1,300 per square metre.
- Mid-Range to High-End Materials: For a 3-bedroom full brick single-level project home, the cost ranges between $1,600 and $1,900 per square metre.
4-Bedroom House
- Budget Materials: For a 4-bedroom single-level brick veneer home on a level block, expect to pay around $1,900 per square metre.
- Mid-Range Finishes: For a 4-bedroom brick veneer single-level project home, the cost is approximately $2,400 per square metre.
- Top-Quality Finishes: For a 4-bedroom full brick two-level home, the cost can reach $2,900 per square metre.
- Architect-Designed: For a 4-bedroom full brick, two-level home with top-quality finishes, the cost can exceed $3,900 per square metre.
5-Bedroom House or Second-Storey Additions
Building a larger house or adding a second storey can significantly increase costs. For a 5-bedroom house, expect to pay upwards of $4,300 per square metre.
Other Costs to Consider
In addition to the main building costs, several other expenses can affect the final price of your project:
Site Preparation and Conditions
As mentioned earlier, site conditions can impact costs. Issues like poor soil quality, block slopes, and flood-prone areas require additional work and materials, which increase the overall building costs. For example, hard-to-work soils such as clay, sand, or rock may require extra foundations or site leveling.
Labour Costs
Labour is a significant part of the construction budget. Hiring skilled workers is essential for quality construction, but it comes at a cost. If you’re working on a tight timeline, you might need to hire more workers, which can further increase the labour costs.
Regulatory and Insurance Requirements
Compliance with local building regulations and obtaining the necessary permits can add to your costs. Additionally, you need to consider insurance for the construction project, including performance bonds and contractor’s liability insurance.
Utility Connections and Council Fees
Connecting utilities such as water, electricity, and sewage to your new house can also add to the overall cost. Additionally, local council fees for permits and inspections are necessary expenses to consider.
Hidden Costs
Be prepared for hidden costs that might arise during the construction process. These can include unexpected delays, price fluctuations in building materials, or additional work required due to unforeseen site conditions.
For more details on what to consider when building a house in Melbourne, read this article on how much it costs to build a house.
Should You Build or Buy a House in Melbourne?
Deciding whether to build a house or purchase an existing one depends on your time, budget, and personal preferences.
Building a house allows for customization to your specific needs but involves higher upfront costs and a longer timeline.
On the other hand, buying an existing house can be quicker and may be more cost-effective, especially if you factor in the time and effort saved.
If you have the budget, looking for a ready-built house in your preferred Melbourne suburb might be a better option.
In such cases, hiring one of the best conveyancers in the area can help handle the legal aspects of the purchase.
A conveyancer is a real estate law specialist who can manage tasks such as preparing documents, investigating property titles, and calculating taxes.
For more information on the role of a conveyancer, check out this detailed article on what is the role of a conveyancer when buying a property.
Once you find the right conveyancer, it’s time to begin property hunting. You can look for one through Soho’s search page, or you can download the app to get the full experience of shortlisting your next home in Melbourne!
FAQs on Cost to Build a House in Melbourne
Will construction costs go down in 2024 in Australia?
Construction costs are anticipated to remain within typical margins through 2024 due to national dwelling approvals being consistently below average in 2023 and expected to continue this trend.
How much does it cost to build a house in Melbourne?
The cost to build a single-storey house in Melbourne typically ranges from $2,300 to $3,600 per square metre, varying based on the number of rooms and finishes included.
How long does it take to build a new house in Melbourne?
Building a new house in Melbourne generally takes about six to twelve months. This timeline can extend beyond a year for more complex constructions due to various preliminary requirements.
How much does it cost to build a house on your own land in Australia?
The costs associated with building a house on your own land in Australia can vary widely, from $1,300 to $3,900 per square metre, inclusive of design, materials, labor, and other construction-related expenses.
