How much does it cost to build a house?

“How much does it cost to build a house?” It’s one of the first questions people ask – and one of the hardest to answer with a straight number. That’s because the cost of building a home depends on many factors: where you’re building, the design you choose, the level of finish, and even the condition of your block.

While it’s difficult to give a one-size-fits-all figure, understanding what influences the total building cost puts you in a stronger position to plan and budget, especially if you’re considering a house and land package.

Build New vs Buy Established

Right now, buying an established home is often cheaper upfront than building new, especially in areas where land and construction costs are high. For buyers who need to move quickly, want to be in a built-up suburb, or prefer not to go through the building process, buying established can also be the more convenient option.

But while the initial price tag might be lower, older homes can come with ongoing costs for repairs, upgrades, and maintenance, which can quickly add to the overall spend. Building a new house ensures everything is up to today’s building codes and expectations, from energy efficiency to layout, and provides the confidence that you won’t be dealing with ageing infrastructure or hidden issues down the track.

With a house-and-land package, you also have more certainty around your budget and fewer surprises along the way. For many first-home buyers and growing families, building new offers a better long-term fit, even if it means a slightly higher starting point.

How much does it cost to build a house: The Key Factors

The building cost of a home isn’t just about square metres or base prices, it’s the result of a mix of variables, some predictable, others more site-specific. To budget accurately, it’s important to understand how each factor contributes to the overall cost.

Land costs are one of the biggest variables. In regional areas like Geelong, land is often more affordable and in some estates block sizes can be more generous. In the Geelong Growth Corridor, the median lot price in Q1 2025 was $384,450, according to RPM Group’s Victorian Greenfield Market Report. That’s significantly lower than Greater Melbourne’s median, yet still reflects growing demand, with PropTrack data showing Geelong’s median house price sitting around $762,000.

You’ll also need to account for stamp duty, transfer and registration fees, and any local council levies.

The size and layout of your home play a significant role in the overall building cost. Larger homes naturally require more materials and labour, and custom layouts often involve added time and complexity during construction. While a simple, single-storey design can help keep costs down, custom or double-storey builds, especially on sloped blocks or with structural changes, will generally increase the total price.

Design complexity also matters. Simpler homes with standard inclusions are faster and cheaper to build. In contrast, homes with intricate facades, split levels, or highly customised features demand more planning and labour, adding to both cost and timeframe.

Labour costs are often underestimated. While materials are easy to spot on a quote, labour from carpenters and bricklayers to electricians and plumbers can add significantly to your total spend. And with Australia’s ongoing construction labour shortage, labour pricing is likely to remain elevated.

Knowing the average building costs in your area can help you set more realistic expectations, and comparing prices or quotes from multiple builders is a smart way to make sure you’re getting fair value for both labour and inclusions.

There are also fixed charges that builders apply before construction begins, typically covering site preparation, surveying, and planning permits (if required). On top of this are variable costs, such as material upgrades, specialist installations, or the need for additional excavation depending on your land conditions.

Speaking of land, site conditions are a major cost factor. Soil type, slope, drainage, accessibility, and utility connection all influence how much it costs to prepare your site. A sloping block or rocky soil may require more extensive (and expensive) foundations.

Material costs are still elevated compared to pre-pandemic levels, with timber, steel, and concrete all impacted by global supply issues, local shortages, and regulatory shifts. Using locally sourced, standard materials will generally be more affordable, while high-end finishes or imported materials will drive prices higher.

Location affects more than just land price. Labour availability, transport of materials, and even local planning requirements can all impact how much it costs to build in a specific area. Metropolitan builds may face higher labour costs and stricter compliance requirements, while rural builds could encounter increased logistical expenses.

Lastly, timelines can also influence construction costs. Rushed builds may require premium labour rates, increase the risk of delays, or result in costly mistakes. Working within a builder’s realistic timeframe can help you avoid unnecessary premiums or future rectification costs.

Base price vs final cost

For buyers leaning toward building, house-and-land packages offer a straightforward path especially for those wanting cost certainty and a home tailored to their lifestyle. But as with any major investment, it’s important to understand exactly what you’re paying for, and how advertised property prices translate into the total cost.

When you see a house-and-land package advertised with a “from” price, that figure usually refers to the base price of the home. The base price typically covers the standard house design and basic home inclusions, but not always the cost of the land, site works, council fees, landscaping, or upgrades seen in display homes.

At Geelong Homes, clarity around these costs is a key part of the process. From the start, you’ll receive a detailed cost proposal that outlines the home price, allowances for site preparation, and any additional requirements specific to your block. This proposal helps ensure that you’re building within your pre-approved budget and that the cost you see is as close as possible to the cost you’ll pay.

Display homes often showcase optional upgrades, so it’s worth asking what’s included as standard. For Geelong Homes, that includes premium features like Colorbond roofing, Artusi European appliances, and quality carpet and underlay. Optional upgrade packs are also available for buyers wanting to elevate their home’s finish without straying too far from budget.

A common question from buyers is whether features like driveways, clotheslines, fencing or landscaping are included. These external features usually aren’t part of the base price.The team at Geelong Homes are transparent with all of our inclusions, so there are no surprises down the track.

If you’re interested in House-and-land packages through Geelong Homes your new home consultant will help you choose a home that suits your lifestyle and then work with you to match it with a suitable block. This approach avoids the pitfall of buying a cheap lot that limits what you can build on it.

When it comes to payment, most buyers will take out a standard home loan for the land and a construction loan for the build. These construction loans are drawn in stages – slab, frame, lock-up, fit-out, and completion – with interest only charged on the portion drawn down at each phase. Once construction is complete, the loan converts into a standard home loan.

Ultimately, while the base price is a helpful starting point, the full cost of building your own house comes down to your land, site conditions, finishes, and what’s important to you. What sets Geelong Homes apart is that these conversations aren’t avoided they’re part of the process from day one.

How much does building a house cost: The Estimate

While you may not be able to predict every detail upfront, there are a few ways to get a clearer sense of your costs:

Ask for an itemised quote, including site works and allowances
Understand what’s included in the base price – and what isn’t
Be clear on any upgrades you want to include
Think long-term about building materials and home finishes; sometimes spending more upfront saves money later
Get pre-approval from a lender to set a realistic budget
Compare government support available in your state

Depending on where you’re building, you may be eligible for first home buyer grants or concessions. In Victoria, that could mean up to $10,000 through the First Home Owner Grant, plus a full or partial exemption from stamp duty on homes or land valued under $750,000. Some buyers may also qualify for a low-deposit loan through the federal First Home Guarantee.

Read more: First Home Owners Grant VIC

So, while building a home can feel like a major financial commitment, there are smart and effective ways to reduce costs – without compromising on quality or long-term value. Here are several strategies to help keep your budget in check when building in 2025.

Choose the right-sized home for your needs
Simplify your selections
Avoid over-customisation
DIY (where appropriate)
Furnish and fit out gradually
Get clear on what’s included upfront
Compare quotes and interest rates
Understand Lenders Mortgage Insurance (LMI)

If your deposit is less than 20 per cent, you’ll likely need to pay LMI – an insurance premium that protects the lender, not you. While unavoidable for some, understanding its cost and factoring it into your total build budget will help avoid surprises.

Read more: How to finance your new home

Leave room in your budget

Even with fixed-price contracts, small changes or delays can lead to additional expenses. If possible, secure a pre-approval above your expected spend so you have a buffer in place. It could be the difference between staying on track or feeling stretched.

In the end: How much will my house cost to build?

There’s no fixed answer to how much it costs to build a house – and that’s okay. What matters most is that you understand the factors that shape the cost and work with a builder who’s upfront, flexible, and focused on helping you build within your means.

At Geelong Homes, building isn’t just about price. It’s about building something that fits your lifestyle, your values, and your future.