In a market as complex as the Australian housing market, it can be hard to determine whether to buy or build a home. On average, building a house is usually cheaper than buying a home.
However, this can change depending on the location, type of building, and other hidden costs. Below is a comparison of the costs of buying a house vs. building one.
Is it Cheaper to Build or Buy a House?
In 2024, building a house can be cheaper than buying, depending on location, design, and material costs. However, land prices and construction delays can impact overall expenses. Comparing both options and consulting experts can help determine the most cost-effective choice for your situation.
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What is The Average Cost For Building a House in 2024?
In 2024, the average cost of building a house in Australia is approximately $1,500 to $3,000 per square meter, depending on location, design, and materials. For a typical 200 square meter home, this translates to around $300,000 to $600,000.
What is The Average Cost For Buying a House in 2024?
In 2024, the average cost of buying a house in Australia varies significantly by location. Nationally, it ranges from around $500,000 to $1.2 million, with prices higher in major cities like Sydney and Melbourne compared to regional areas.
Cost of Buying a House in 2024
Buying a house is always the most convenient form of homeownership. It takes the shortest time and often gives you a clear view of some of the hidden costs you’ll face. In short, you’ll know what you’re getting.
How much you’ll spend on a home mainly depends on its location and the size. For instance, the median property price in Sydney is around $1,055,131, which is quite expensive compared to Perth’s $588,068.
Hidden costs are also a big part of what you’re going to incur if you opt for this route. Among the most common costs that may inflate prices include:
- Stamp duty (depends on home value)
- Property valuation fees ($100 – $300)
- Home loan application fees ($200 – $700)
- Legal and conveyancing fees ($700 – $2,500)
- Mortgage registration and transfer fees ($450 – $1,500)
- Pest and building inspection fees ($300 – $600)
- Council and water rates ($500 – $1,400)
- Lender’s mortgage insurance (1 – 3% of loan)
- Moving costs ($75 – $300 per hour)
If you’re a first-time buyer, some states exempt you from a few of these taxes like the stamp duty. However, this still leaves the cost of buying a home quite high.
Buying some homes may also come with recurring costs such as repairs, council rates, insurance, among others – which you’ll have to pay.
Cost of Building a House in 2024
If you opt to build a house, your biggest costs will come from purchasing or leasing the land, and the cost of the materials.
The median building cost in Australia ranges between $611,298 and $1,020,556, depending on the location, or around $620 – $3,900 per sqm. These prices are high and are continuing to rise because land keeps appreciating. The cost of labor is also a huge factor in construction. In periods of labor shortage, your construction costs could rise rapidly.
Other factors that will influence the building costs include:
- House size – Larger houses will require more labor and materials, hence cost more.
- Finishing quality – To get the best quality finishing in your home, you’ll need high-quality materials, which tend to be more expensive.
- Extra features – If you include extra amenities in the home such as a swimming pool, fencing or other landscaping features, your costs will drastically rise.
While there’s probably more costs you’ll incur when building, you’ll also get to enjoy a cheaper stamp duty compared to home buyers, and receive more grants.