The cost of building a house in 2021
If you’ve always dreamt of building a new home, you may be wondering how recent events have impacted house construction prices including contractor costs and stamp duty fees. While the repercussions of COVID-19 on the real estate sector have been significant, it’s not all bad news for aspiring home builders and buyers.
The economic response to the Coronavirus has led to many government initiatives designed to help first home buyers finance the cost to build a house.
The recent creation of the HomeBuilder grant, and the established First Home Owner Grant, are just two examples of government initiatives that have been designed to help turn real estate dreams into more tangible realities.
The impacts of COVID-19 on the real estate industry
As we’ve seen since early 2020, the property market has not been immune to the economic effects of COVID-19.
As for attitudes towards entering the market, the events of recent times have also caused many to reassess how they might enter the market. A recent survey conducted by Savvy has revealed 91.6 per cent of Australians believe property prices may become unaffordable. Even so, initiatives remain in place to help eligible Australians stake their claim in the sector.
What does it mean for you if you want to build a home?
Building your own home is beneficial for many reasons, firstly, finding a house that meets your every need can be far more difficult when buying an existing home, but when building a new home the personalisation options are almost endless.
Secondly, choosing energy efficient options when building your home can save you thousands on electricity and gas costs in the long run.
What is the average cost of building a home?
Despite predictions that construction times and costs could improve in the next few years, the actual impact of COVID-19 on the average cost to build a house remains relatively unclear. That being said, the landscape has certainly changed, so let’s take a closer look at how these shifts may impact your bottom line.
When calculating the cost to build a house on your own land, it’s important to make a list of key expenses as you plan to ensure you’re budgeting for all steps and not leaving yourself open to any financial surprises.
Builder and contractor costs
The price you’ll pay for builders and contractors will depend largely on which company you choose to build with.
In Australia, a builder’s hourly rate can vary from $70 to $120 and are subject to change depending on your location, the nature of work, and the type of house you’re looking to establish.
Architecture and design costs
To estimate the cost of hiring an architect in Australia, a site inspection is essential to get the best quote.
Architects will either charge by the hour, a fixed fee, or a percentage fee, for the latter, you can estimate that an architect will charge anywhere between 5 and 20 percent of the total cost of your build.
When it comes to figures to factor into your budget, an architect can cost anywhere from $800 to $4,500 to prepare designs for a home, as estimated by online marketplace OneFlare.
Council fees and registration
Before you start to build a house, you or your agent must find out from the local council whether you need a planning permit. If so, you must get one before you can get a building permit which can be obtained from a registered private or council building surveyor.
Materials and building costs
Many materials and building costs are considered prime costs, which refer to items that are subject to change during the construction of your home.
These include things like fixtures and fittings such as tiles, doors and taps, as these items may change depending on your final choice.
If you’re working with a building contractor, an estimated amount for the costs of materials is provided when signing your building contract.
Government schemes that are available
First Home Buyers Grant
If you’re entering the market for the first time, the $10,000 First Home Owner Grant is still available for eligible applicants buying or building their first house within Australia. Promising news for those who may have believed their home owner aspirations would melt into mere pipe dreams.
Stamp duty fees discounts
Simply put, stamp duty is a general tax imposed by the state government on the purchase or transfer of almost any real estate. The good news is that most first home buyers are eligible for stamp duty discounts and, in some cases, exemptions.
Recent initiatives such as HomeBuilder were designed with the intention to support confidence in the residential construction sector, and encourage consumers to proceed with plans that may have been put on hold due to the uncertainty of recent times.
Applications for HomeBuilder closed at midnight on April 14, 2021, but help to buy a home is available on an ongoing basis for eligible individuals who require assistance with budgeting for contractor costs, builder costs, and stamp duty fees.