Welcome! We're excited to be able to help you understand how to budget for building a new home. So let's get started.
There are four elements to understanding the overall cost of a home:
- The cost of your land
- The cost of your home
- The cost of your siteworks
- The cost of your finishings
Let's look at each one of these elements individually, because as you will discover, it's important to be aware of your total budget for your new home so that you don't find yourself spending more than you were anticipating.
1. The Cost of Your Land
The price of your land will vary depending on location.
It will decrease in price the further you move away from the City, and it will increase the closer you move towards natural features such as the beach or the river.
You will also notice that as you look at areas which are considered to be less desirable, that the price will be lower.
However, it is wise to take into account the fact that these areas may also not appreciate as quickly in value.
As you think about your overall budget, it's also important that you don't spend so much on your land that you can't afford to build a home which is appropriate for the area.
For example, building a single storey home in an area which is otherwise full of double storey homes is not necessarily a smart financial choice.
In the same way, you don't want to be the most expensive home in the suburb either, and risk over-capitalisation.
So there's an important balance that you need to strike by building a home which is both appropriate to the area that your block of land is located in, and which also fits within your budget.
Let's use a 450sqm block as a standard across the Perth Metropolitan area from north to south to compare the price of land:
Alkimos - $260,000 - $330,000
Clarkson - $330,000 +
Burns Beach/lluka - $500,000+
Landsdale - $375,000
Ellenbrook/Aveley - $260,000 - $300,000
Caversham - $330,000 +
Piara Waters - $320,000
Success - $350,000+
Wellard - $260,000+
Baldivis - $250,000
Byford - $240,000
Mandurah - $210,000+
Please note the cost of land changes with the market, so please use the links to each estate to accurately assess if these costs are still applicable today.
2. The Cost of Your Home
There are a couple of different factors that you need to think about when building your new home.
- Is your home for you to live in personally?
- Is it for investment purposes only?
If you are building your home as an investment property, then it is crucial that you don't spend more than you need on your building project.
The purpose of building for investment is to give you the best possible ‘return on your investment’ (ROI). Therefore you don't want to get too emotionally involved in the design and make changes that you think would be nice if it was your own home. You will probably end up spending money unnecessarily, and it may not add any extra value that you can pass on to your tenants in rent. If you're working with a reputable builder, then trust the fact that they have been designing homes for many years, and they know what works well and what people like in a home.
However, if you're building the home for you and your family to live in, then you want to make sure that the home design includes as many of the features that are important to you as possible.
You'll want to spend more money on your own home, particularly in areas such as the kitchen and the ensuite.
For many people, the kitchen is the centre or hub of the home, so it's important for this to be a feature – because you're going to spend a lot of time here. It is however also the most expensive room to fit out due to the cabinetry work and appliances.
Just like when you buy a car or go on a holiday – or even when you buy clothes, there are different levels of quality with everything that we purchase – including when you build a new home.
All builders are not the same, and indeed those builders who are basing their pricing on quality are not trying to be the cheapest. Their goal is to offer you a better built home, a more personal and enjoyable customer experience, for a fair value price.
Unfortunately, in order to generate more sales many of the cheaper builders in Perth that you will hear advertising on television and radio, will try and imply that their homes are just as good as those that cost a great deal more – but they are not.
It is so important that you understand this point when selecting your builder. Are you basing your selection of builder on the cheapest price...or are you selecting your builder on the basis of quality at a fair price. Generally you can't have both.
Some people shop at K-Mart and some people shop at David Jones. Both are good options depending on what your expectations are. But you can't have a K-Mart price and expect a David Jones level of service or quality.
It's no different when building your home... no matter what the advertising may promise.
Our 2 storey range of homes starts from around $500,000 for one of our three bedroom designs.
The Byron is part of our Deluxe range of homes, which are designs based on our featured display homes, however, they have been scaled down a little in size and specification to make them more affordable to first home buyers and others who are on a tighter budget.
The same quality of construction is provided as our more expensive homes, and the same tradespeople build these designs, however, the homes are simpler in their layout, and have been built using standard measurements of materials to reduce additional costs.
We have a number of luxury house designs from around $550,000.
For example the Frontier is a big family home, that fits on a 10m wide block.
As with all of our affordable two storey homes for narrow lots, you can build the home as is or make changes to the floor plan to suit your individual needs.
If your budget is less than $500,000 for a two storey home then we would recommend looking at our single storey homes which start from closer to $400,000.
Our Display Range of homes have versions from just over $650,000
Starting with one of these versions of our display homes mean you can select which options you would like to include in addition to the base price.
Each of our display homes has a huge selection of features that you can choose from depending on the upper limit of your budget.
Typically, the majority of this series of homes have a price range from $550,000 up to $850,000 if you were to incorporate all of the display options.
3. The Cost of your Siteworks
Siteworks - or the costs which are related to your block (and not the house itself) can vary greatly depending on which part of Perth you are building in.
The minimum amount you need to allow will be somewhere in the vicinity of $15,000.
However, if you're building close to the ocean they will be a little higher, or if you're building in a heavy clay or rock area then they can be higher still.
The most common items that you will need to cover are follows:
- Site Preparation
- Connection of Services
- Construction of the Driveway Crossover
- Kerb / Footpath Bond
- Installation of Soakwells
- Upgrade to Treated Pine due to European House Borer
- Integration of the National Broadband Network through your home
It is very important that you get a realistic and honest assessment of the site-related costs for your home up-front, as this can have a big impact on your overall budget.
4. The Cost of Your Finishing Items
One of the biggest frustrations amongst potential new home-builders, is discovering too late in the process of what is not included in the standard price of a new home.
There are five main items that you will need to allow for in your budget in order to completely finish off your home.
Floor Coverings (Between $20,000 - $40,000)
Apart from the 'wet areas' (Bathrooms/Laundry and Toilets which are tiled), the remainder of your home is left as a concrete slab.
The most popular options are timber, tiling and carpet and these will vary in price depending on the number of areas included with each item.
Internal Wall Painting (Between $10,000 - $15,000)
All of the painting – including the exterior paint work, the ceilings, cornices, internal doors and door frames is included in the price of your home. What is not included is the painting of the internal walls.
We offer for those who choose to include internal wall painting in their contract a 3 coat system which includes an initial 'sealer' coat, plus two additional coats of paint throughout.
Most people in Perth would love to have air-conditioning included in their home due to the hot summers that we experience.
There are three main types of air-conditioning to consider depending on your budget.
The most popular option (and most expensive) is Ducted Reverse Cycle Air-Conditioning. Typically this will cost somewhere between $10,000 - $20,000.
This provides both heating and cooling to your home.
The next option - providing cooling only for summer - would be Ducted Evaporative Air Conditioning.
The price for one of these systems is around $6,000 - $10,000.
The most economical option is a Refrigerated Split System, which is mounted in the wall of one particular area - usually the Living/Dining/Kitchen rooms.
Including installation costs, one of these units will cost around $2,000.
The standard lighting for a new home consists of one bayonet light per room or area. On the exterior of your home there will usually be three light points included. (Front Entry/Outside of Laundry/ Alfresco).
If you are wanting to include any pendant lighting, lighting fixtures or downlights, then these are an additional cost. Pricing varies considerably depending on your style and taste – but it isn't too hard to spend $5,000 to $10,000 on lighting.
The final area that is not included in the standard pricing of your home, are your window furnishings such as blinds or curtains.
There are a wide variety of options including vertical blinds, venetian blinds, holland blinds, wooden shutters and curtains – just to name a few, and the pricing varies accordingly.
How Much Should I Allow?
If you were to include all of these finishing items into your building contract, then you would need to allow a minimum of approximately $40,000 to complete your home off with these inclusions. If you would like to include a pool and higher specification items you could easily spend in excess of $100,000.
Everyone has a different style and budget, so by doing some of these items yourself, or negotiating directly with suppliers who might be having a sale, you can definitely save yourself some money.
Some Final Considerations
As you can see, there is a lot to consider when it comes to establishing your overall budget to build your new home.
The most important thing is that you go into your building project aware of all of these costs – before you commit to getting started with a builder.
The biggest complaint we hear, as a home builder in Perth who does care about informing our clients with all of the important information up-front, is that people were not made aware of all of these 'hidden costs' of the building.
They then find themselves stretched to the limit financially and unable to enjoy the whole process due to the additional worry and stress.
So do your homework, and if you need some help, one of our professional new home consultants can help walk you through this entire process, and provide you with peace of mind and a clear understanding of how it all works.