New Homes 101: 9 Hidden Costs When Building a House

November 15, 2019 | IN Media Release and News | BY AVID | 9 min read

In contrast to buying an established home that’s been designed by and for someone else, building something brand new means you can create a home exactly as you want. There’s no feeling quite like walking into a new house and knowing it was built just for you. Building a home is an exciting process, but it’s important you are aware of all the finer details, including any hidden costs of building a house. AVID Property Group is here to walk you through some of the main costs when building that you may not expect, so you can be prepared for anything.

What Costs Are Involved in Building a House?

There are two key costs to consider when building a home: prime costs and provisional costs. Prime costs are estimated basic prices produced in the original quote, while a provisional sum is the amount estimated for a specific task, material or service.

More and more Australians are choosing to live in residential communities because it makes the building and buying process stress-free. Once you’ve signed on the dotted line, you can save yourself from worrying about costs you may have missed. Everything is bundled into two contracts; one for the land and one for the build.

1: Site Costs

Your block of land will need to be adequately prepared before construction can begin, and this typically starts with a soil and contour survey. The biggest cost in building a house is likely to be these two separate tests, as the results will directly impact what you pay for site preparation. Soil and contour tests are done to make sure the weight of your new home will be supported. If your site is difficult to get to, this can add to site costs as well. Sometimes this will involve excavation or demolition work, and don’t forget that you’ll need to get your major services connected like water, sewage, electricity, gas and more.

Soil meter sticking out of mound of dirt, displaying a measure PH, temperature and moisture on its screen.

Soil Test

A surveyor will visit your site and test the soil, giving it a classification which will indicate how difficult it is to build on. If you have rocky soil, for example, you could incur an added cost. Speak to your builder, as this cost will depend on the type of home you wish to build.

Contour Tests

Building on a slope can incur extra costs. A contour test surveys the slope of the land in detail, and you may need to adjust your plans based on the results. Ask your builder about what’s required. A ‘problematic’ block could require:

  • The removal of trees, logs, and/or shrubbery
  • Building retaining walls
  • Building on or across a hill
  • Flattening out the slope

For a hilly block of land, you’re often going to need a custom design and specialist builder who can assure structural integrity even on a slope. If you’d like to build a home without the fuss of site costs, consider buying land for sale in a master-planned community.

2: Temporary Site Expenses

Many people assume that this cost is a part of their building contract – and it often comes as a surprise. You might need to fund the following temporary site requirements upfront:

  • Portable toilets
  • Temporary electrical
  • Water connections.

These items are essential for tradesmen to prepare for construction and begin their work.

3: Land Registration

If you’ve found the perfect block of land but it’s currently unregistered, that will be an additional expense you’ll need to cover. If you’re unsure, double check whether the completed subdivision is documented with the land registration office. For some, this can delay construction. The good news is this: a master-planned community offers both registered and unregistered land, meaning you may not have to worry about extra land fees when building a house.

Some of AVID’s communities include Harmony on the Sunshine Coast, Brentwood Forest near Brisbane, The Rathbone in Sydney’s Surry Hills, Waterford in the Hunter Region, and Savana and Bloomdale in Victoria.

4: Driveway and Fencing

This will depend on your builder and what’s included in your contract, so be sure to go over the fine print to ensure you get exactly what you expect from your build.

Sometimes driveways won’t be included in your builder’s quote and you’ll need to hire an external team to pour you a new driveway. Similarly, if you want any specific fencing and it’s not included in your original package then this will be an added cost.

Brand new outdoor wooden fence, receding into distance, framed by blue sky, bright green grass, dirt and tree cover.

5: Council Costs

By being aware of potential council costs, you can find out if they are relevant to you and adjust your budget accordingly:

  • Cost of approvals, development application fees, construction certificates, long service leave levy and administration fees.
  • The cost of wheelie bins for construction waste will depend on what you require and where you are building. For an accurate figure, speak to your local council.
  • Road closure fees could be an extra cost if the builders are required to close the road or interrupt traffic. This could be payable to either your local or state government – ask your building company if this will apply to you.

Council Overlays and Covenants

When it comes to building your home, there are mandatory requirements for some councils. These council overlays or estate covenants can result in extra costs, commonly including:

  • Characteristics: some councils outline what an ‘acceptable appearance’ is for street facing facades on the home you build.
  • Acoustics: if you’re building in close proximity to train lines, busy roads and major arterial routes, you will require additional noise reduction upgrades such as double glazing and insulating walls.

For specific costs, speak to your local council. Try to buffer for these extra costs – they’re usually going to be around 10% of the total rate you’ve been quoted.

6: Landscaping

Some builders may include very basic landscaping services in their quote to build your home, although those will typically be minor inclusions such as patches of grass or a few pavers leading to your front door. Most builders quote for the house itself and not its surroundings, so you’ll need to source – and pay for – a landscaping company. In some cases, however, landscaping comes complete with the home—Villaworld Homes is one example of this.

overhead shot of garden mowing bright green grass along winding path in landscaped, sunny garden with sectioned trees.

To save on this cost, consider buying in a green community surrounded by visually stunning landscaping, tailor-made for its inhabitants. In every AVID community, there is a dedicated commitment to creating green spaces like parks and wetlands.

7: Flooring

Since it’s technically ‘inside’ your new home, paying extra for flooring is something you may not consider. However, some builders only include the standard concrete slab as their flooring.

Make sure you find out exactly what they are offering in your quote, and if you are interested in specific flooring then you’ll either need to negotiate with your builder or pay a bit extra for timber slats or tiles for your new home.

Alternatively, you can purchase a turnkey package; this will cover finishing touches like flooring. This could include carpet, floorboards, tiles, vinyl, and so on. Consider the expenses of each, and speak to your builder about getting a quote.

8: Modifications to the House Design

If you purchase a house-and-land package, you’ll already know exactly what your home will look like. And while most designers will work with you – before construction begins – on modifying your home to include everything you want, as soon as you sign on the dotted line that means your home design is locked in.

Designer pointing to computer at table with pens and palettes, showing young couple something on screen.

Of course, sometimes your tastes will change and you’ll want to make an additional modification. But remember that if the designs have been signed off (and especially if construction has already begun), you’ll likely have to pay additional fees to make any changes. While this doesn’t technically come under hidden costs of building, many people don’t read their contract properly and end up paying extra for those added electrical points or changes to the colour of your grout.

9: Environmental Requirements

If you’re in New South Wales, you will have to comply with BASIX – a set of regulations enforced by the state government. These guidelines ensure that new builds are sustainable and eco-friendly, and may mean extra costs if you need to add elements to receive your BASIX certificate. This is awarded based on thermal performance, energy and water savings.

Environmental Factors

If you’re in a bushfire-prone area, Bushfire Attack Level (BAL) will come into play and potentially mean added costs. The same goes for Flood Prone Areas, where 1:100 Flood will determine any extra expenses.

Other Expenses That Could Come Up

Quick checklist:

  • Wall tiles
  • Electrical provisions
  • Bathroom extras
  • Outdoor taps

Couple and child standing and looking at new house.

Cost Saving Tips When Building a House

Here are a few tips to save money when building a house:

  • Budget early and check that everything you want is covered and correctly stated in the contract. This will allow you to make any changes sooner rather than later, so you can organise additional sources of income if necessary. When you buy a house and land package, there are no surprises throughout construction; all your expenses are rolled into one transaction.
  • Go with a simple floor plan, for example, with rectangles and squares. By using standard measurements, you can reduce the cost of labour and materials.
  • Plan interior design and visit a display village to budget for appropriate floors, joinery, finishes and colours. If your budget is tight, compromise on materials, fittings and standards. You can always upgrade later!
  • Choose simpler roofing – a single ridge-line with a shallow pitch.
  • Do your driveway later, or do a DIY job with gravel until you can pay for standard concrete, paint or a textured finish. The same goes for landscaping; purchase some lawn seed, put in some elbow grease and build your garden up over time.

At AVID, we create communities that bring people together – to enhance their lives and the way they live. To find out more about our developments around the country and how you can invest in the home of your dreams, contact us today.

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