Money talk
How much does it cost to build a home in Sydney?
Everyone’s path to creating their dream home is as unique as the person themselves. So, it makes sense that the construction costs can vary greatly from one project to the next.
Costs are affected by the type of land built on, the house size and the floor area, the choice of materials, the home-owner's personal design tastes, chosen added extras, and the quality of the builder. As a result, newly built homes in the same suburb – or even on the same street – can have very different costs.
According to 2020 ABS Buildings Approvals data the average Sydney-based Australian home has a 252 sqm footprint. But not everybody wants a typical home.
This article will look at the costs of building a home in Sydney. We won't promise you'll end up with an exact dollar figure however, by reading on, you'll gain a good understanding of the areas you need to consider when calculating construction costs, have more knowledge about the benefits and challenges of building a new home in Sydney, and more insights about how to approach your builder of choice.
Living and building in Sydney
Sydney is an amazing place to live. One top of the natural beauty of the harbour, beaches and bushland, Sydney is a vibrant multicultural city with great weather and top-level education, employment and leisure opportunities.
Sydney is not a cheap place to live but what most people overlook when making this broad statement is that Sydney is also an expansive city, with housing costs varying significantly in different regions.
It's also easy to get caught into looking at the costs of buying an established property rather than the cost of building. And to overlook the government assistance schemes that help with building.
Reasons to build rather than buy
In most cases, building a house is actually cheaper than buying one. One reason for this is government grants designed to help with the cost of building a house in Sydney.
The First Home Buyers Assistance scheme allows eligible first-time buyers of homes valued at less than $800,000 to apply for a full exemption on transfer duty (formerly called stamp duty). That also applies for when purchasing vacant land for building a home worth up to $350,000. When buying a new place valued between $800,000 - $1m, or land up to $400,000, a concessional rate may apply.
A $10,000 First Home Owner (New Homes) Grant is also available. To be eligible, anyone who has purchased vacant land and has signed a contract with a builder should be aware that the value of the block and building costs mustn’t exceed $750,000.
There's been a lot of publicity about the rising costs of building, thanks to supply chains being negatively affected by the pandemic and general cost-of-living increases. However, lower-range homes in Sydney are cheaper to build in than Brisbane and at a similar price to Perth. That's according to data from the 2024 Rider Levett Bucknall 'Riders Digest'.
Another motivation for building a home in a rising market is the possibility of gaining equity from day one. Gains are still strong in Sydney with February 2024 data from CoreLogic showing that houses are increasing in value at a rate of 11.7 percent year on year (significantly higher than Melbourne with 4.4 percent).
By the time your home is finished, it may well be worth more than what it cost to build!
But how much will it cost to build a home in Sydney?
Often the simplest way to calculate construction costs is by square meterage of the house size (often referred to as the 'floor area').
Data from Rider Levett Bucknall revealed that in 2023 (the most recent data available), the price to build a home in Sydney ranged between $2,350 and $7,200 per square metre.
That's a huge range, isn't it?! That's because of the price increasing if a home includes bespoke design elements, site-specific works or complex planning permits.
In Sydney, and many regional parts of NSW, the cost of land will be the largest monetary component when building a home. According to the Urban Development Institute of Australia’s (UDIA) 2024 State of the Land report, Sydney’s median lot price in 2023 was $641,250.
What am I actually paying for?
When starting to look for a builder for your ideal home, it's important to know what's included in the price tag.
Most ads or building company websites will display what the industry calls a 'base price'. It's called that for a reason as this figure will usually include just what's needed to get the house to lock-up stage.
Potential buyers should treat that figure as a launching pad because the dollars will change significantly in the time before you get your keys on move-in day.
For a complete price that includes everything from the floor coverings and light fittings inside to the driveway and covered patio outside, ask about the 'turnkey' figure.
For full transparency on price, consider a builder like Rawson Homes, where you can budget with confidence with our all-inclusive, upfront quotes.
From site costs to council requirements, BASIX (Building Sustainability Index) assessment fees and signature design choices, we will work with you to ensure there are no unexpected costs*.
Custom vs project home builder
One of the biggest steps in the home-building process is choosing who will create your dream home. The type of builder you choose will directly impact the final cost of construction, so it pays to do your homework.
Most builders can be divided into two camps. Volume, or project home, builders tend to construct many homes each year from a catalogue of floor plans and designs. In contrast, custom builders make bespoke homes specifically created to a client’s needs and tastes. Deciding between the two often comes down to budget.
Volume builders usually offer significant savings over custom builders by standardising designs and maximising efficiency with materials and trades. A quality volume builder will offer clients some wriggle room when it comes to making changes but can still offer more attractive prices than a custom builder.
Other typical expenses include connections to services such as water, sewerage, electricity and gas, as well as additional extras like fencing and retaining walls. Again, some of these costs will be included in your tender when building with a project home company.
For buyers who might not have a block of land, a volume builder may also offer house and land packages, which can streamline the process and price even further.
The benefits of building with a project home company like Rawson Homes is that there are three building processes offering the whole spectrum of choice, from pre-set floor plan and design available in the Select process, some changes allowed in the Adapt process and full customisation in Rawson Homes Tailored. For a more affordable and faster build option, our Rawson Homes Thrive home design range offers standardised designs, meaning faster build times and repetitive purchasing power that ensures cost savings are passed onto the customer.
What about if I need to knock down an existing house before I build?
Some expenses can occur even before the first sod has turned on your new block. Site work costs vary for each project depending on factors such as the size and type of terrain.
If you’re doing a Knockdown Rebuild project with Rawson Homes, we can ensure the costs of demolishing existing buildings are included in your tender.
We also have more information for you in our 'Ultimate Guide to Knockdown Rebuilds'.
Finding a builder you can trust
Building your own home is a very personal project so everyone’s experience and expenses will differ.
We hope this article has given you an overview of how to start considering your budget for your dream home and wish you all the best with your plans for building in Sydney.
To take your plans to the next level, we invite you to get in touch with a Rawson Homes consultant today.
FAQs
What is the average cost of building a house in Sydney?
Data from Rider Levett Bucknall revealed that in 2023 (the most recent data available), the price to build a home in Sydney ranged between $2,350 and $7,200 per square metre.
Are there any incentives for building a house in Sydney?
The NSW Government offers a $10,000 First Home Owner Grant for people buying a new home. And, if you are a first time home buyer, the First Home Buyers Assistance scheme provides exemption on transfer duty (formerly called stamp duty).
Is it cheaper to build or buy a house in Sydney?
In most cases, building a house is actually cheaper than buying one. That's partly because of government assistance schemes but is also because you have more control over which features and design elements you include to ensure maximum bang for your buck.
How much does it cost to build a 3 bedroom house in Sydney?
Data for Sydney estimates prices between $2,350 and $7,200 per square metre. Because three bedroom homes tend to have smaller living spaces, a 3 bedroom home can be a solid and affordable way to enter the property market.
How much does it cost to build a 4 bedroom house in Sydney?
Prices vary depending on the design you choose as well as the selected building costs. Recent data shows that house building costs in Sydney can range between $2,350 and $7,200 per square metre. Using a reputable builder that includes all costs at the quotation stage will help you know where in that range your dream home sits.
How much does it cost to build a 5 bedroom house in Sydney?
You need to consider the price of land as well as the home building costs. 5 bedroom homes can require large sized land blocks however the option of two-storey homes means you can save money by building on a smaller block and put the extra funds towards your home.
*Excludes asbestos, changes required as a result of legislative amendments and changes to unregistered sites.
