While the price for purchasing an established home in Australia has risen, the cost of building a home has also obviously grown. The typical cost of building a house varies owing to a variety of circumstances, so the ultimate price will depend on whether you choose a show home created with cost efficiency in mind, or a one-of-a-kind home that has never been built before.
It’s important to note that when building a new house, materials account for 40-45 percent of the entire cost, while labor, taxes, insurance, and overheads account for the remaining 35-40 percent. And the builder would like to generate a profit of roughly 15-20%. While COVID-19 has had an influence on construction prices, it is reasonable to assume that with so many revisions, border closures, and limits, it has altered the landscape.
Costs have risen and project completion times have dragged out as a result of unpredictable currency rates, affected supplier chains, and lower productivity owing to COVID-19 constraints. Add to it global supply chain concerns caused by the Russian-Ukraine conflict, and things get tougher.
The scarcity of supplies and labor is expected to drive up house building prices dramatically in the coming years. Builders are now facing significant supply constraints, labor and material shortages are a significant impediment, and inflation is driving up the cost of materials – timber prices have risen by more than 20% in the last few months, reinforced steel costs have gone up by more than 40% in the last year, and plastic piping costs 26% over one year ago.
Meanwhile, because of rising inflation in Australia, practically every category of building supplies has gotten more expensive. According to ABS data, steel product prices increased 42.1 percent in the fiscal year ending March 2022.
As a result of all of this, nowadays the average cost of building your own home is $76,000 more than 12 months ago!
The cost of building a home is affected by a variety of factors, including, but not limited to, the size of the residence, the location and availability of resources, the slope of the ground, and the quality of the fixtures and fittings. Remember that a builder’s claimed base price is usually only a starting point and does not reflect how much your home will actually cost when it’s fully finished. As a result, there are several expenditures involved in the construction of a house.
Here are a few expenses you may have neglected.
If you want a total price that includes everything from the carpeting to the landscaping and roadways, as well as the white picket fence in front, you should seek for a “turn-key” package, which means all you have to do is turn the key and step inside.
To give you a general approximation, according to ABS numbers from April 2022, the average cost of building a home was roughly $473,000 in April 2022. (including houses and unit data).
Reference: “How much, on average, does it cost to build a house in 2022?” by Bryce Yardney