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Buying vs Building a House: Which Is Cheaper in 2025?

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When you’re ready to secure a new home, one of the biggest decisions you’ll face is whether to buy an existing property or build a brand-new house. While each option comes with pros and cons, many Australians are drawn to the idea of building due to the potential cost savings and the freedom to design a home tailored to their lifestyle.

But is building always cheaper than buying? The answer depends on your goals, budget, and the level of involvement you’re prepared for. This article dives deep into the cost breakdown, design considerations, and financial implications to help you make the most informed decision.

Is It Cheaper to Build Than Buy?

Generally speaking, building a home can be more affordable than buying, particularly when you’re comparing against the price of turnkey homes in competitive markets. That said, the building process requires hands-on involvement — from planning and budgeting to project management and approvals. It can be time-consuming and stressful, but for many, the satisfaction of creating a custom home makes the effort worthwhile.

Key Advantage of Building: Customisation

When you build, you can create a home that perfectly fits your lifestyle and needs. You control the layout, the finishes, the number of rooms, and the design choices — something you rarely get when buying an existing home.

How Much Does It Cost to Build a House?

The average cost to build a home in Australia sits at around $1,393.55 per square metre, according to the Australian Bureau of Statistics (ABS). For a typical 229.8 sqm home, that equates to about $320,000 for the construction portionalone. However, this doesn’t include design costs, planning permits, site works, or any potential delays or budget blowouts.

Architecturally Designed Homes

Architect-designed homes often start at $3,000 per sqm, going up to $5,500 per sqm or more. As Alvic Samson of Alvic and Partners Architects puts it:
“Architecturally-designed homes are a reflection of personal taste and luxury. And when it comes to luxury, the sky is the limit.”

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Home Design and Architect Fees

If you go the custom-build route, expect to factor in design fees. Architects typically charge between 5% and 10% of the total build cost, with residential projects averaging around 10%. These plans must be submitted for local council approval, which can take anywhere from 30 to 100 days, depending on the council.

Your architect or builder can guide you through this process to avoid costly delays.

Custom Build vs Project Home: What’s Cheaper?

Some buyers prefer hiring a builder and architect for a custom-designed home, while others opt for project homesoffered by volume builders.

Cost Differences:

FactorCustom BuildProject Home
Design FeesHigh (architect fees)Often included
MaterialsPriced individuallyBulk discounts
LabourMay cost more (specialist subcontractors)Included in overall price
FlexibilityHighLimited

Volume builders can save money by standardising designs and buying materials in bulk. If budget is a concern, this route may offer better value.

Plumbing and Site Works

Plumbing is a major cost that varies depending on your property’s size and the number of fixtures. It’s essential to work with an experienced plumber who can review your home plans and provide an accurate estimate.

Site conditions also play a role. Sloping blocks, poor soil, and limited access can all increase costs.

What Affects the Final Build Cost?

Beyond size and location, a range of factors influence the final cost of your build:

  • Slope and site access
  • Custom vs volume-built
  • Construction type (timber frame, brick veneer, double-brick)
  • Number of storeys
  • Builder pricing structure
  • Material and finish selection

Cost Estimates by House Type

Below are ballpark estimates based on property size and build type:

3-Bedroom Homes:

  • Weatherboard on flat block (budget build): $1,300/sqm
  • Brick, single-level with mid-high finishes: $1,600–$1,900/sqm

4-Bedroom Homes:

  • Brick veneer, single-level: $2,400/sqm
  • Architect-designed full brick, double-storey: $3,900+/sqm

5-Bedroom or Second Storey:

  • Architect-designed: $4,300+/sqm
  • Second storey extensions: $1,850–$3,300/sqm

These are only estimates. Costs vary widely based on location, materials, and market conditions.

Questions to Ask Before Choosing a Builder

Your builder can make or break your home-building experience. Be sure to ask:

  • Are you licensed?
  • How long have you been building homes?
  • When can you start, and what’s the timeline?
  • Can you provide a detailed quote?
  • Do you have references?
  • Are you insured?

Getting and Comparing Builder Quotes

Once your plans are ready and you understand the cost range, get quotes from several local builders. Always:

  • Compare inclusions and exclusions
  • Review timelines and payment schedules
  • Confirm who the project manager is
  • Understand how variations will be handled

Must-Have: A Written Contract

It’s legally required and protects both you and your builder. Your building contract should cover:

  • Full scope of works
  • Fixed or variable price
  • Total project cost
  • Timeline for completion
  • Payment stages
  • Dispute resolution process

Choose from standard, cost-plus, or lump sum contracts based on your needs.

Building a house in Australia can offer significant savings over buying — especially if you’re strategic with your materials and design. However, the process requires planning, patience, and active involvement.

Before you commit, weigh the time, cost, and energy required. By doing your homework and working with the right professionals, you can build a home that reflects your lifestyle, meets your budget, and delivers long-term satisfaction.

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