Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
How much does it cost to build a house? This question does not have a one-size-fits all answer but building your own home may be a cheaper option compared to buying a house.
While it can be cheaper option to apply for a construction loan and build a house, it could also be more expensive if you don’t know about the hidden costs involved.
To eliminate budget surprises, here are the common hidden costs of building your own home:
A soil and contour test can costs around $1,000 to $2,000. Builders need to do this before they give you a fixed quote to construct your house.
They analyse the soil by drilling holes in your property. They determine if you have a rocky soil or any issues with your soil that makes it difficult to build, if there are there will be extra costs.
On the other hand, a contour test analyses the slope of the property. The bigger the slope is, the greater the costs. It could add up $6,000 for every 1 metre of fall on the property and $9,000 per 1 metre if the fall is sideways across the block.
This may be the highest cost you will make when building your own home since this expense has the widest range of variability when calculated. The costing will depend on the result of the soil and contour test. It could costs around $10,000 to $70,000.
Aside from the soil quality, there are other things that will take an effect with the costing such as the trees needed to be cut down, traffic interruptions, and construction of retaining walls to name a few.
Flooring may not be included in the quotation of your builder. Your house will be built on a concrete slab and you will be the one to decide on what kind of flooring you want.
Make sure you plan for floorboards, tiles, and carpets. You may also speak to your builder so you can get a quote on the flooring you want.
Apart from the flooring, the driveway may not be included in the quotation of your builder. The price of making a driveway will depend on what type, the design, and the material used.
If you’re land is not yet registered, it may incur extra costs such as connecting the electricity, water, sewage, gas, and telephone to name a few. Speak with your builder or real estate agent to check if the location has been registered. If not, ask for an accurate estimation of these costs.
During the building process there might be alterations or changes you want to your house. If there are any, it could add up extra costs on labour, material costs, legal costs, engineering, and penalty costs for modifying the contract.
It’s better to make sure that you like the design plan before proceeding to the construction to stay within the building budget.
Building a house in New South Wales will require you to comply with BASIX or Building Sustainability Index. This is the government’s regulation to improve the sustainability of houses making them more eco-friendly.
Building your own home will need financing. One of the common type to finance your house is through a construction loan.
This is typically a short-term loan used to pay for building a house in an agreed timeframe. You may ask your lender about acquiring a construction loan, and know how much your borrowing capacity is.
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