What does is cost to build a house?

Posted by on Oct 14, 2013 in Blog, How to/ Tips | 5 Comments

I have meetings regularly with potential new clients to see if we will work together to design their new home or renovation. Most of these people have never engaged an architect before; often I’m the first architect they have spoken to.

Given the cost of land and building is so high, many people will never be lucky enough to afford a house designed and built for them. If they are, they will likely have been saving for many years to realise this dream. I always feel honoured to be given this task. It’s a huge responsibility; they are putting their trust in me to guide them on how they should spend their hard earned money to realise their perfect home.

I have noticed a common theme to most of these meetings – since these people have often never undertaken such a project before, they have no reference point as to the cost to build a house or renovate. Many of these meetings go no further than just that, a meeting, when they learn the cost to build what they want is out of their reach. The project is either shelved, or they compromise their needs by going to one of the big name building companies and buy an already designed “cookie cutter” home instead. My thoughts on these homes are explained in this previous blog post… you always get what you pay for.

I walk away from such meetings saddened that I had to deliver the news that they can’t afford what they want. I was thinking recently about what is leading to this lack of understanding on costs? Most of us know what we need to spend if we are on the hunt for a new car. We have a sense of what a Toyota costs, or whether we can afford more and head off to BMW or Porsche instead.

So why the misunderstanding of what a new house costs?

I put much of the blame on the media: Shows like ‘The Block’ and the beautiful home magazines many people buy. These lovely homes are what most of us dream of. However the houses in these magazines all cost near to a million dollars and many of them millions to build, but that is never mentioned. This is where people get mislead. Buy a car magazine and the price of the new Toyota Camry or the Porsche 911 is always there.

There is nothing wrong with calling an architect to learn what your new home will cost. However, I think there needs to be more transparency so people aren’t so disappointed to find out many years later they can’t realise their dream. People would get a sense of what they need to spend when seeing the flashy house in the magazine costs $1.2 million to build. The might say “ok that’s not going to happen” or “yes I can afford that”. Since buying a property is often something we do to make money on at a later date, and the investment to do so is so large, people keep their cards close to their chest, and I feel this is why magazines don’t ask or display the project amount. It then means I have to break the news to potential clients.

To help you better understand, I want to explain what the entry point is to having a home designed for you by an architect:
– A brand new average sized home will start at $600,000. Size and level of finish will add to the costs from there.
– Renovating is far more complex. Re doing the kitchen and bathrooms, repainting, new flooring and carpet throughout will be anywhere from $50,000 – $150,000 again depending on the size and level of finish (quality and design of what’s chosen). Once you start doing this as well removing walls and adding an extension it will easily head over $250,000. Heritage homes will be more again due to their delicacy. It all comes down to how much you change and how much you add. Most renovations I do see the original house double in size, and on average these projects cost about $500,000 – $600,000. It costs more to renovate than to build from new.

Add on top of this the garden. These can cost anywhere from $20,000 for a make over to $150,000 when they include new fences, the maturity of the plants chosen, driveways, pathways, an irrigation system etc etc.

Go to a project home builder and a new home will be anywhere from $200,000 (a very small single storey) to $800,000, but on average around $500,000 for just the house.

Like with anything, that which is mass-produced is cheaper to make, and quality will be reflected by its price. Anything that is a one off will always cost more. That’s where the price difference comes in using an architect. Every block of land is unique, what surrounds it and potentially blocks out sunlight, its slope, the way it faces is different to every other block out there. Where the Toyota and Porsche will carry the same family and drive over the same surfaces, what we need in our homes and where they are built is different for every single situation.

5 Comments

  1. Michelle Astudillo
    October 14, 2013

    Thanks for the post Darren – I totally relate to what you have said. As an interior designer, I am often asked the same kinds of questions. Generally, potential clients have little concept of costs, and without taking down a detailed brief and understanding what kind of expectations they have for their finished project, it can be tricky to answer an initial enquiry. One thing is for sure – Working with a design professional will always achieve a superior and cohesive result

    Reply
    • Darren Naftal
      Darren Naftal
      October 14, 2013

      My pleasure Michelle, and thanks for your comment. It’s great to hear of your experience. It is tricky, but just part of what we need to do.

      I could not agree more: clients get a far superior result working with a design professional.

      Wishing you all the best with your projects.

      Reply
  2. Simon
    October 23, 2013

    I think the biggest problem with the Block is that the contestants only pay for the materials and all the labor/profit is paid for by the show (which is not common knowledge), which makes people think they can get stunning & massive kitchens for under $20k!

    We were lucky in that we knew from the start we could only go with a “volume builder” but used what we saw in those shows/magazines to help us determine what features we liked/disliked & the “upgrades” to standard features.

    The landscaping cost was a huge surprise, as was the cost of window furnishings/curtains (unless you want roller blinds with very bad/cheap fabrics).

    Reply
  3. CT
    September 30, 2015

    Hi Darren – I have just discovered your website and am loving all your blog posts so just want to say thanks for posting them.

    I am doing my research on build vs buy and found your blog posts very helpful. Although I have to say I feel a bit disheartened reading this particular post about the starting cost of an architect designed house (but good to know). Need to rework my budget but hope to use your service one day in the near future.

    Rgds
    CT

    Reply
    • Darren Naftal
      Darren Naftal
      October 1, 2015

      Thanks so much for your kind words. I’m always so pleased to hear my blog posts are so helpful and enjoyable to read.

      Yes I know the costs are high and catch many by surprise, I wish it weren’t the case. However it’s such a worthwhile investment, both in terms of the amazing house you will get to live in and the added return you will get on your investment when it comes time to sell. It’s a win win situation in the end.

      I hope we do work together at some point.

      Reply

Leave a Reply