Building a house is a significant investment. It is important to have a clear understanding of the costs involved before you begin the process. In Australia, construction costs vary based on many factors, such as location, property size, materials and labour costs. A clear understanding of these factors is essential in calculating the total expenditure for your home project.

With this knowledge, you can make informed decisions throughout the building process, ensuring your finances remain on track. In this article, we will delve into the specifics of the costs involved in building a house in Australia.

What Is The Average Cost Of Building A Home In Australia In 2023?

The cost of building a home is commonly expressed in terms of cost per square metre. In Australia, the average cost of building a house is around $1,400 to $1,800 per square metre. However, it can range from $900 to $3,000 per square metre. For example, building a house in a regional area using standard materials and hiring a less-experienced builder can be relatively inexpensive. On the other hand, building a high-end house in a metropolitan area with premium materials and an experienced construction company can push costs near the top of the range.

The cost of building a luxury home in Australia can range from $500,000 to $1 million or more, while the cost of building a basic home can range from $300,000 to $500,000. The specific cost of building a luxury home will depend on the specific high-end features and design elements included in the home.

The following table shows the average cost of building a home in each Australian state:

State Average Cost of Building a Home (2023)
New South Wales $350,000 to $500,000
Victoria $300,000 to $450,000
Queensland $280,000 to $400,000
South Australia $300,000 to $450,000
Western Australia $320,000 to $450,000
Tasmania $250,000 to $400,000
Northern Territory $400,000 to $600,000
Australian Capital Territory $400,000 to $600,000

Based on the average cost of building a home in each Australian state, the national average cost in 2023 is about $330,000 to $480,000.

Please note this is just a rough estimate. Actual costs can vary greatly depending on location, size, design, quality of materials used, local market conditions and labour costs.

Construction Industry In Crisis

The construction industry in Australia has been facing significant challenges in recent years, with multiple companies struggling to continue operations.

Sadly, customers have also been affected by the industry’s struggles. Strong demand with fewer builders, slow supply chains and riding costs have all helped drive up the average price of building a home. Potential homeowners who want to undertake construction projects in 2023 must be aware of the state of the industry and be wary of extended wait periods, unstable building companies and perhaps difficulties in financing.

Factors Affecting The Cost Of Building A Home In Australia


The location of the home is one of the biggest factors determining the cost of building a home. Construction in a more densely populated city with a higher cost of living will generally be more expensive than building a home in a rural area. This is because labour costs are higher in metropolitan areas, and land is generally more expensive.

Size Of The Property

Building a larger home with more complex design elements will generally be more expensive than building a smaller, more basic home. Larger properties require more materials, labour, and time to construct, which drives the cost.


Using high-end materials such as marble or hardwood flooring will be more expensive than laminate or tile. Using high-end appliances and designer fixtures will be more expensive as well. Some materials are also more expensive in certain regions of the country, so it is essential to research the cost of materials in your area. Concrete (per cubic meter) costs more in New South Wales than in other states.

Labour Costs

This includes the cost of hiring contractors, electricians, plumbers and other professionals required to build a home. The cost of labour varies depending on the experience and skill level of the workers. The cost of hiring a builder or a contractor can also vary depending on the size and complexity of the project.

Permits And Regulations

Local government agencies may require certain approvals or certifications before construction can begin.

Tips To Save On Building Costs

  • Choose a smaller home design with fewer rooms.
  • Use less-expensive building materials, such as laminate or tile, instead of marble or hardwood flooring.
  • Research and compare prices for contractors and other professionals – and negotiate for better rates.
  • Become familiar with the local building regulations and obtain all necessary permits promptly.
  • Ask the builder or contractor to provide a detailed cost estimate that covers materials, labour and other expenses; this can you help create a realistic budget and avoid surprises.

Consult Our Experts

Before building a home, take the time to research and compare prices for materials, labour and permits. You should also consider the different ways to save on building costs and make a budget based on the estimated costs.
Talk to our mortgage brokers if you want expert guidance as you apply for a construction home loan. Call us on 1300 889 743 or enquire online today!