Cost of Building a House in Perth
Damon Stroud
Cost of Building a House in Perth: A Comprehensive Overview for Homebuyers
Building a house in Perth is an exciting journey, but understanding the costs involved is essential for every prospective homeowner. The cost of building a house in Perth typically ranges from $2,300 to $5,500 per square metre, depending on design choices and material selections. With prices fluctuating based on various factors, this guide provides clarity on what to expect when budgeting for a new home.
This post explores the different aspects that influence construction costs, from land prices to building specifications, to equip readers with the knowledge needed to make informed decisions throughout the building process. Whether it’s a first-time build or the creation of a dream home, a clear understanding of these expenses will support homebuilding plans and aspirations.
Overview of the Perth Housing Market and Construction Prices
The Perth housing market exhibits dynamic trends influenced by various economic factors, which are worth examining alongside the larger Australian landscape.
Current Trends in Perth
As of September 3, 2024, the median house price in Perth was $688,000, a 20.7% increase over the previous year. The median unit sale price was $455,000, a 13.8% increase year-on-year. This growth reflects ongoing demand for homes as the population grows. Building costs have also surged, averaging around $2,100 per square metre in the established market.
Unrealistic Constructions Costs
Despite some builders advertising new unfinished homes from $240,000, these exclude site costs, shire/legal fees, painting, landscaping, paving, carpets, tiles, lights, (the list goes on). No-one actually builds these lost leader style homes as they are simply too small with the tiniest kitchens/bathrooms possible. Like everything the public is attracted to a cheap price so a well oiled builder will have this on their list purely to get an enquiry.
Realistic Constructions Costs
A realistic construction cost for a standard new home typically begins at $370,000 (finished), with luxury builds costing significantly more. This price excludes Land. This is entry level single storey construction built to a fair and reasonable level by a decent builder. As we can/do shop our designs around to different builders we have found when we save on price, the construction times go up, or the quality and after care service goes down.
Don’t forget your Land!
Land prices contribute to the overall investment required to build or buy property here. Land costs vary widely, with the average median land price approximately $267,250. These trends highlight both opportunities and challenges for potential homeowners. To get an accurate price you need to ensure you have allowed for House Design + Land + Legal Fees + Turnkey items/finishing’s
Comparison with Other Australian Cities
When comparing Perth’s housing market to other major cities, such as Sydney and Melbourne, the differences are pronounced. For instance, Perth offers relatively more affordable housing options. Sydney’s median house price, for example, stands much higher at around $1.2 million, making Perth a compelling choice for buyers. In terms of building costs, Perth's rates are competitive, with Melbourne’s costs averaging slightly higher. This makes Perth a favourable market for both investment and personal residence.
Factors Influencing Construction Costs
The cost of building a house in Perth depends on several key factors, including land prices, labour costs, material costs, and regulatory expenses. Each of these elements can vary widely and directly impacts the overall budget for a construction project.
Land Prices in Perth
Land prices are often the most significant upfront cost in home construction. As of September 2024, the median land price in Perth stands at approximately $270,000.
Variations exist based on lot size:
Small lots (less than 300sqm): Median is around $258,000
Medium lots (300 to 450sqm): Median is approximately $333,000
Large lots (greater than 450sqm): Prices can escalate significantly, often exceeding $400,000 depending on location
Proximity to the city center also affects land prices, with areas closer to amenities typically commanding higher prices.
Labour Costs
Labour costs constitute a substantial portion of construction expenses. In Perth, wages for skilled tradespeople can vary widely based on experience and demand in the construction market. Skilled trades, such as electricians, plumbers, and carpenters, often have higher hourly rates due to specialized skills. As of 2024, the average rate for skilled labour might range from $50 to $80 per hour.
Material Costs
Material costs have seen significant fluctuations recently. According to various reports, the average building cost per square metre for a house in Perth ranges from $1,400 to $2,700 (materials only). The choice of materials directly affects expenses, with high-quality materials driving up total costs but offering better longevity and aesthetic appeal. Global events have also impacted supply chains, resulting in higher prices for essential materials like timber and steel.
Regulatory Expenses
Regulatory expenses, including building permits, inspections, and other legal requirements, can add considerable costs to the budget. In Perth, permit costs vary depending on project size and complexity, generally ranging from a few hundred to several thousand dollars. Compliance with local zoning laws and building codes is necessary, with some cases requiring additional fees to meet specific regulations.
Planning and Design Considerations
Careful planning and design are critical to the success of a building project. Choosing the right Architect / Builder / Building Broker and understanding design complexity ensure that a vision aligns with necessary requirements and constraints.
Choosing the Right Architect / Builder / Building Broker
Selecting an Architect / Builder / Building Broker is a fundamental step in the planning process. Key factors to consider include:
Reputation: Checking reviews and past projects
Communication: Ensuring the professional listens and understands the vision
Local Knowledge: Familiarity with Perth’s regulations and climate is essential
Meeting with potential candidates helps gauge their understanding of project needs and expectations. Discussing timelines and budget considerations upfront helps to align both parties from the start.
Building Design and Complexity
The design of a home significantly impacts overall cost and functionality. Key aspects to consider include:
Layout Efficiency: A well-thought-out floor plan maximizes space utilisation
Materials Selection: Standard or high-end materials impact the budget
Sustainability Features: Energy-efficient designs can reduce long-term costs
The Building Process
Navigating the building process in Perth requires knowledge of local regulations and a clear understanding of construction stages to ensure compliance and efficiency.
Perth Building Codes and Regulations
Perth’s building codes and regulations guide every aspect of construction, adhering to the Building Code of Australia (BCA) standards for safety, health, and sustainability. Checking local zoning laws is crucial, as they dictate land use and design choices. Approval processes typically involve submitting plans to the local council for review.
Cost Estimation and Budgeting
Understanding cost estimation and budgeting is crucial for planning a home build in Perth. Accurate initial cost estimates provide a solid foundation, while budgeting for additional expenses reduces the likelihood of unexpected financial burdens.
Initial Cost Estimates
Building costs in Perth typically range from $2,300 to $5,500 per square metre as we have stated. For a standard three-bedroom house of approximately 175 square metres, costs can range between $370,500 and $778,750 pending your taste.
Budgeting for Additional Expenses
Beyond initial construction costs, it’s wise to budget for additional expenses, such as:
Permits and Fees: Building permits can add several thousand dollars
Financing Costs: Interest rates and lender fees for loans
Landscaping and Outdoor Work: Post-construction landscaping costs can range from $5,000 to $20,000
Turnkey costs: carpets, Tiles, painting, lights, air con/heating
Setting aside 10-15% of the overall budget for unforeseen expenses is recommended.
Strategies for Cost Management
Managing costs effectively is crucial when building a house in Perth. Focusing on reducing construction expenses and negotiating favorable terms with contractors and suppliers helps to keep the budget on track.
Additional Considerations
Building on a rear strata or "house behind house" lot can often be a cost-effective strategy, especially if family or friends have a large backyard that could accommodate a new home. This option may allow you to build in a more desirable suburb rather than being limited to the outskirts.
Our team can build any form of home, including single-storey and double-storey new homes. We offer comprehensive in-house services, including architectural design, new home design, and builder services, making the process streamlined and efficient.
For further insights into construction costs across Australia, consider exploring the Rider Levett Bucknall (RLB) Australia 2024 Digest. RLB specialises in tracking construction costs nationwide, and their comprehensive Perth Digest PDF provides additional detail on what’s included in construction budgets and pricing trends.