Let’s take a look at building costs in Melbourne and the Yarra Valley and what to consider when budgeting for your custom build home.
As we step into 2025, the topic of housing prices continues in conversations across Australia. Because of real estate market changes, many homeowners are focusing on custom built homes instead of buying existing ones.
Although building prices have increased, building with custom home builders provides distinct benefits. Unlike off-the-plan or prefabricated designs, tailored design allows for creative solutions and clever workarounds that can help manage your budget without compromising on your vision.
Average building prices in Melbourne
Cost is a key consideration for all homebuyers. With over two decades of experience, we create solutions that meet our client’s budget and your vision. The below figures provide a general guide as each project is different. To get a more accurate estimate based on your needs and preferences, please consult with us.
The cost of building a house can vary significantly in Melbourne and Yarra Valley. This recent article explains the average cost ranges from $556,600 to $1,391,500 for a 253 square metre home. Construction costs typically fall between $2,200 and $5,500 per square metre with most Melbourne homes costing between $3,000 and $5,000 per square metre to build. Premium builds can reach up to $8,000 per square metre.
Here’s a breakdown by the number of bedrooms:
- 2-bedroom house (120 sqm): $264,000 to $660,0001
- 3-bedroom house (175 sqm): $385,000 to $962,5001
- 4-bedroom house (260 sqm): $572,000 to $1,430,0001
- 5-bedroom house (300 sqm): $660,000 to $1,650,0001
Factors influencing building costs
Naturally larger homes require more materials and labour, increasing overall costs along with high-end materials, custom joinery, and specialty finishes which drive up expenses. Challenging terrain, like slopes and certain soil types, can increase excavation and foundation costs. Adding a second storey can increase costs by $1,000 per square metre due to construction requirements like scaffolding and lifts, plus the additional building materials and labour.
Commonly overlooked costs include soil and contour tests, site preparation, flooring, driveways, and landscaping, utility connection, council fees and permits. For instance, soil testing alone can range from $1,000 to $2,000, while site costs can vary widely from $10,000 to $70,000 depending on the land’s condition and any necessary modifications.
Preparing for unexpected expenses
Preparing for unexpected costs also involves thorough planning and communication with your builder. Ensure that all design elements are finalised before construction begins to avoid potentially expensive variations later on.
A good rule of thumb is to set aside 10-15% of your total budget for unexpected expenses. This contingency fund will help cushion the impact of any surprises that may arise during construction. Additionally, when working with any builder, it’s important to carefully review contracts to ensure all costs are clearly outlined and there are no unexpected allowances or fees.
At Cobalt Construction, we pride ourselves on providing transparent and detailed contracts, so you can feel confident in knowing exactly what’s included. Careful budgeting and planning, and proactive communication will smooth the process of building your dream home with any custom home builder.