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The Hidden Costs Of Building Your Own Home

Not only is the prospect of custom-designing your own family home a huge draw to thousands of Australians, but it could also be cheaper than buying. That is, as long as you avoid some of the unexpected costs of building – some of which may surprise you.

There are heaps of potential hidden costs just waiting to jump out at you and destroy your building budget. Here are five common ones:

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1. Soil test and contour survey

Before any builder or building company will give you a fixed quote for a build, they will probably need to do soil and contour tests, likely to cost in the region of $1,000 to $2,000. If you have rocky soil or any issues with your soil that makes it difficult to build, then you will incur extra costs. And if you’re attempting to build on a slope, expect to pay even more. Retaining is expensive!

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2. Site costs

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This could well be the biggest cost you will incur, and unfortunately it has the largest variability as it will be based on your soil and contour tests. You could be paying anything from $10,000 to $70,000! As well as elevated building costs for a sloping block, the NSW Department of Housing reminds buyers to also consider the costs of connecting and maintaining services, including:

  • water
  • electricity
  • gas
  • telephone
  • sewerage
  • fire control

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3. Flooring

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That’s right – don’t forget you want to walk around on something at last remotely pleasant and not all building quotes will include flooring in your house. Unless you’re happy living on a concrete slab, consider things like carpet, floorboards and tiles because you’re likely to be spending the best part of $10,000 on them.

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4. Driveways

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Many building quotes will only include the dwelling you’re going to live in, so assuming you want a driveway, you’re going to have to pay for it. Depending on the type of driveway, this could be fairly cheap or it could be extremely expensive. To save money you could look at not getting a driveway done immediately and look for cheap ways to do the driveway yourself until you have enough money to get a concrete driveway built. Or you could sell your car.

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5.Modifications

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If you’ve decided on a design and signed off on a building contract, be aware that any variations to the plan can cost you big time.

A change of heart in the middle of a construction project can run up a variety of additional expenses including:

  • legal costs (to change the contract)
  • penalty clauses
  • extra material costs
  • extra labour costs
  • engineering, drafting or approval costs

Also, while the construction costs of building a typical house from scratch can be relatively easy to estimate with a rough rate per square metre, the cost of modifications can be extremely difficult to forecast. As Archicentre points out, modifications can involve extra repairs (e.g. re-wiring or re-stumping) and/or additional work such as demolition. These sorts of alterations do not add floor area to a building, so general rates per square metre for modifications aren’t usually reliable.

So make sure you’re totally happy with a design plan before you sign the contract!
See our comparison table below for a snapshot into the current market offerings for variable home loans with links direct to the providers’ website. Please note that this table is sorted by comparison rate (lowest to highest) with product that are based on a loan amount of $600,000 with a LVR of 80%, under a building profile in NSW. You can try this home loans comparison tool for yourself here.

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Other costs

There are numerous other potential costs just waiting around the corner of your new home, such as land registration fees, and even having to buy new wheelie bins from your council – which could cost you as much as $600 by the way.

Is the extra effort worth it?

Some of that might sound a bit scary, but remember, building your own house is going to be one of the most exciting things you ever do. It will almost certainly increase your blood pressure for a few months, but when all is said and done you will hopefully have a beautiful home to truly call your own.

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Helpful resources

Many state government departments have some excellent resources for would-be building clients. Try these:

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