Breaking Down The Cost Of Building A New Home In Perth

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Right now, building a home in Perth can feel like a bit of an unknown. There are several common factors that consistently influence building costs but with the impact of Covid-19 and current global conflicts, just what can you expect to spend when building a house today?

We’ve teamed up with the experts at New Generation Homes to gather a range of important factors to help you get your new home journey started. First though, it’s worth understanding how build costs are divvied up in the first place, which essentially looks like this:

40-45% for materials cost
35-40% for the labour cost
Taxes, charges, insurance and overheads

Now you’ve got a rough idea of the cost breakdown, let’s take a look at some of the major factors that may come into play for your dream home…

External Factors

If you have even passing interest in the economic goings on of the world you’ll understand COVID-19’s impact on an array of industries, and the new homes business is definitely one of them. From a shortage of tradespeople and supply chain issues bringing a strain on materials, it’s all added up to create price rises over the past 12 months, including:

Timber prices have risen over 40%
Bricklayers rate approached double
Plastic piping costs 26% more than a year ago^

Throw in further supply chain issues due to the current Russia-Ukraine conflict, and it’s plain to see how the average cost to build Australian homes has increased, with the current average building costs per square metre to build a house in Perth between $1400 and $2700^.

Rider Levett Bucknall’s online calculator is a good place to start getting some rough estimates.

Common Factors

Home Size

To put it simply (and obviously): bigger homes = higher build costs*, but what does that look like in dollar figures? As a current rough guide, the cost per bedroom for a 3-bedroom, single storey home using budget materials is around $1300 per square metre, while four bedrooms pushes that cost up to $1900. This only becomes more relevant when you look at the average home in Australia, which is around 195.58 square metres, a figure that rises to 236 square metres when it comes to the average size of new home builds^.

Quality

Similar to above – the better the quality, the higher the cost, and it might take a little compromise on your behalf to keep budgets in check. For instance, if you’re stuck on a statement stone benchtop or polished concrete floors, perhaps a more mid-range tile in the bathroom will help balance costs out. It is important to keep in mind not just the aesthetics of what you choose but also consider long-term benefits. House frames made from TRUECORE® steel won’t shrink, twist or warp over time, so there’s less chance of sticking windows, jamming doors, and wavy roof and wall lines. A lot of this will also come down to your choice of builder, and finding one that can work within your budget is important to the process.

Design

Even the design process can come with a hefty price tag, particularly if you’re working with architects or draftspersons who may charge anywhere between 8-15 percent of total build costs to design the home^. One simple way to cut costs in this area is working with a volume builder, who offers pre-designed floorplans. This removes the design cost as you select from tried and tested floorplans, which can still be customised to suit your needs. It also lends towards simpler designs, which will also keep costs down.

New Generation Homes’ builds house frames from TRUECORE® steel that have a high strength-to-weight ratio and stay straight and true, they’re an ideal choice for modern home design. Long spans, open-plan living spaces, architectural rooflines; they’re all possible with the inner strength of TRUECORE® steel. And frames made from TRUECORE® steel are suitable for both flat and sloping blocks. Check out New Generation Homes’ New Home Designs page which offers more than 60 to choose from, with factors like budget, bedrooms and lot size all adjustable.

Site Considerations

“Site conditions” refers to the vacant land you’re planning to build on things like soil type, are there existing trees/rocks to work around or remove, water table, block steepness and more. This has a direct impact on your build costs as it denotes how much preparation is required to lay your future home’s foundations, along with potentially influencing the house design.

It’s also important to consider site dimensions, access (will materials need to be craned in if no rear access) and orientation (north-facing is ideal in Perth, anything else may require additional windows or special features for natural energy storage). Bushfire Attack Level (BAL) is also important if you’re building in bush-laden areas – for example a block in Dawesville may be cheaper to buy, but you might be dealing with more intense city council safety requirements.

Time frames

Due to the above-mentioned external factors, time frames on builds continue to get longer, ultimately leading to increasing holding and accommodation costs. When signing up to build estimated timeframes may be given, however, it is very difficult to predict the exact time frame prior to starting. A few things that can help is to be prepared for your pre-start meeting, do some research as to your selections, and ask about materials that are locally pre-fabricated for example frames made from TRUECORE® steel. During your build it’s important to establish a healthy line of communication with your construction supervisor early on in the process, ensuring updates remain consistent and honest throughout the build.

Construction Method

There are plenty of methods of construction that all come with a different time frame, including using frames made from TRUECORE® steel, double brick and brick veneer, with many custom builders specialising in one particular type. It is important to do your research, you can check out New Generation Homes’ building methods PDF for more information on how they go about it, including how different materials will impact thermal efficiencies and acoustic properties of homes.

Potential Hidden Costs:

The cost of the block of land (unless you decide to purchase a house and land package);
Cost of landscaping and fencing;
Cost to build smaller items like a clothesline, letterboxes etc. (if you purchase a turnkey package i.e. move-in ready home, these are usually all included);
Cost of extras like swimming pools (and the landscaping around them);

While construction costs do continue to rise, New Generation Homes are working hard to carry price increases to keep home building costs accessible and your new home dreams alive. They offer a range of new home designs to suit all budgets, including under $250K, under $275K and under $300K.

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*It may not always be the case, discuss this with the builder to understand the detailed full costs of your build.

^Sources:

https://charterkc.com.au/research/residential-housing-construction-costs-update/
https://propertyupdate.com.au/how-much-on-average-does-it-cost-to-build-a-house/
https://www.nhbb.com.au/news-blog/why-are-costs-building-new-home-increasing-so-fast-perth#:~:text=A%20shortage%20of%20labour%20creates,is%20approaching%20double%20the%20price
https://www.realestate.com.au/advice/how-much-does-it-cost-to-build-a-house/#average%20cost%20of%20building%20a%20home
https://www.commbank.com.au/articles/newsroom/2020/11/commsec-home-size-trends-report.html#:~:text=Australia%20is%20again%20building%20the,biggest%20increase%20in%2011%20years
https://www.architectureanddesign.com.au/features/list/architect-of-draftsman-how-to-tell-what-your-next#:~:text=The%20most%20common%20fee%20structure,be%20around%206%2D8%25

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