In this year, 2022, the average cost of constructing a home will be around 284,057 dollars. This may seem like a lot, but it is really less than the typical house sales price in the month of September 2021, which was around 408,800 dollars. The entire cost of constructing a custom house varies greatly based on your preferences or choice, the building materials you purchase, labour prices, and even where you live.
What is the Breakdown of the Average Cost to Build a Home?
Below are the steps and the average costs in order for an individual to build a home and prepare for it.
- Buying And Prepping Land
- Drawing Up Plans and Getting Permits
- Prepping and Building the Foundation
- Framing the Home
- Installing External Elements
- Installing Plumbing and Electrical
- Adding Interior Finishes
- Finalizing Additions
1. Buying and Prepping Land
Obviously, you will be needing land in order to build a house on it. It is not just about the land as you will also have to clear it which means there will be some tree removal and ground levelling. The price of buying a lot varies based on a number of factors which includes the location and the size of the lot. The average cost of a property is around $76,500 dollars, however, lands that are underdeveloped in rural regions may be purchased for as low as 3,000 dollars.
2. Drawing up Plans and Getting Permits
There will be contractors as well as subcontractors who will be the ones to begin planning how to build a house by the time you have your land. This will also include hiring an architect for designing the floor plans and obtaining all relevant permissions. House plans usually cost roughly around the average of 5,000 dollars, but the precise price will still depend on how simple or complicated your home will be, as well as what sorts of building licenses and preparatory inspections you will require. The cost of a building permit varies by area, but on average, it costs roughly around 2,200 dollars.
3. Prepping and Building the Foundation
There will be a crew who will begin excavating the foundation of your home. There is the cheapest foundation which is a concrete slab wherein next to it is a somewhat more costly crawl space than the last one is the basement foundation which is the most expensive one. This usually costs around 14,500 dollars.
4. Framing the Home
Consider this phase to be the skeleton of your house. Plywood is the one that will be used in order to cover the framed floors. Walls will also be framed and a lot more. The roof trusses are next constructed and installed on top of the wall frames. Overall, depending on the floor layout as well as the size, this procedure will cost anywhere from 20,000 dollars up to 50,000 dollars, with an average cost of around 35,000 dollars.
5. Installing External Elements
The next one is that every essential external wall, opening element and roof will be erected. This will imply that the external finishes such as siding will be applied to the walls followed by the installation of windows as well as doors then the roof will be covered with some roofing felt which will all cost a total of around 50,000 dollars.
6. Installing Plumbing and Electrical
Then you will be needing to put in all of the essential systems which will keep your house running smoothly that including power, air and water. At this point, there will be no fixtures to be installed as pipes and ducts are the ones that will be installed. All that will cost an average of around 52,500 dollars.
7. Adding Interior Finishes
Of course, interior design is very important which includes flooring, internal doors, drywall and more fundamental elements in order to make the freshly built building into a living housing. Everything that can be seen in the house will be done. This is likely to be one of the more costly aspects of the construction process, and the actual cost will be determined by your unique tastes. Interior finishes can cost around an average of 112,500 dollars, but they may cost considerably higher depending on your preference.
8. Finalizing Additions
Anything that you wish to improve to your property, such as a driveway, or even landscaping is included in this phase. These tasks can be undertaken at any time during the home construction process. Any additions will obviously increase its overall cost. A driveway paving, for example, will cost roughly around 6,600 dollars. The increase in cost will depend on the added things that you want to improve.
What are the Factors affecting Building Costs?
All kinds of things can influence your overall cost, which includes the current trends in real estate, the labour in your location as well as the availability of supplies, and the materials’ types and qualities you select as well. The overall final cost of your house will also be impacted by the sort of home you construct. A tiny, basic house may be built at a reasonable price. Naturally, a higher-end, luxury property with numerous levels and architectural flair will be a lot more expensive.
Below are the factors that affect building costs:
- Construction Projects That Are Similar: Similar building projects will be the greatest reference for the estimation of construction. The ultimate expense of similar projects could be used in order to estimate the price of the new building project. The ultimate cost of a previous project must be adjusted to reflect present construction cost indexes.
- Costs of construction materials: Costs of materials, transportation costs, as well as any relevant taxes are all included in the material costs for construction. As a result, while determining building material costs, all of these variables must be taken into account.
- Wage Rates for Workers: Wages for labour varies depending on the location. As a result, the local wage rate should be factored into the equation. If the project must begin after many months of cost estimation, the likely volatility in labour rates must be factored into the computation.
- Conditions on the Construction Site: Construction expenses can be increased by project site characteristics. Not so good types of soil, materials that are contaminated, conflicting utilities, environmentally sensitive areas, groundwater, buried storage tanks, archaeological sites, and other existing conditions, among others, can increase project costs in the construction process if these things are not taken into account during computation.
- Requirements of the Law: Obtaining regulatory approval can indeed be pricey at times. These expenses must also be factored into the cost calculation.
- Inflation: A building project might last for years before it is done or finished. The cost of materials, tools, equipment as well as labour may fluctuate every now and then during the construction process. During the cost estimating process, these price variations should be taken into account.
- Schedule of Project: The cost of a building project is affected by the length of the project. Increases when it comes to indirect costs can raise the cost of a project, whereas decreases in construction costs might raise the cost of a project owing to increases indirect expenses. As a result, building project timelines must be taken into account while estimating project costs.
- Plans quality and specifications: The construction time is reduced by using high-quality specifications as well as construction plans which are properly executed on-site without any delay. Any ambiguous language or badly designed plan may not only cause confusion but also creates uncertainty in the mind of the contractor, resulting in a much higher cost of construction.
- Engineer Reputation: Construction must operate smoothly in order for the project to be completed on the right and set schedule. Project costs will be costlier if the company has a good reputation. The project will operate more smoothly and cost-effectively if indeed the contractor is totally comfortable with a specific engineer or engineering company.
- Requirements with regards to Insurance: Insurance expenses for various equipment and tools and construction personnel should all be factored into costs for building projects. The standard insurance requirements, which include a payment and performance bond, as well as general liability insurance which are for contractors, are common in this type of project.
- Construction Location: If the site is far from accessible resources, the cost rises. Transportation costs for workers, equipment, supplies and other items rise with distance, adding to the cost of the project.
- Contingency: For unanticipated expenditures and inflation, it is usually a good idea to consider adding around 10% contingency to the final cost of the project.
- Construction Project size and type: A huge construction project might necessitate a much larger crew. Local workers may not be that adequate to meet such demands, therefore workers from other areas may be required. With that, extra expenditures may be incurred.
- Review of an Engineer: It is sometimes essential to conduct a technical evaluation of a project in order to ensure that it will be able to fulfil the intended purpose.
How Global Supply Chain Issues are Affecting Construction in Australia
The global supply chain concerns, including the growing demand, the shortage when it comes to supplies, and supply bottlenecks, have continued to drive up the cost of major construction materials such as timber, steel and electrical supplies. This results in an even more burden on Australia’s already tight building markets. Another issue putting strain on the business is a skilled labour shortage which is exacerbated by the international and state border restrictions that make it difficult for workers to apply for positions. Moreover, one of the most significant difficulties now confronting the Australian industry is the escalating cost of basic building materials.
Does the Cost of Building a House Change according to States in Australia?
Houses had the least cost fluctuations, climbing 2.3 percent from permission to start and reducing 0.4 percent from start to finish. There was a change in building costs as the prices of the materials also changed and increased. The pandemic has altered the scene for the construction industry in a multitude of ways, from the supply chain as well as productivity challenges to border restrictions, which results in project completions taking a bit longer and costs much higher during the pandemic.