Hidden costs of building your own home

The cost of building a house relies on the size of the land, house layout, materials, and location. However, there are also a lot of hidden costs associated with home construction that could significantly affect the price of the final build. 

To keep your home construction within budget, you must be aware of and prepare for the expenses related to your home construction. Avoid nasty surprises and keep in mind the following hidden costs of building a new home: 

Soil and contour test 

A soil and contour test can cost anywhere between $500 to $2,000 depending on your location, the size of your property, and the terrain. Larger properties with more complex terrains may have to pay higher compared to those with a smaller land size.  

Builders do a soil test to determine if you have any issues with your soil that would make it difficult to build. And if there are, there will be extra costs to compensate for that as well.  

The soil test is done before the builder gives you a quote on the home construction, which is why a lot of people don’t include this in their overall budgets. 

Meanwhile, a contour test analyses the slope of the property. If your house is found to be on a slope, that could make building it more expensive. The bigger the slope, the greater the costs. It could add up to $6,000 for every 1 metre of fall on the property and $9,000 per 1 metre if the fall is sideways across the block. 

Site costs 

After the builder finishes the tests, they’ll calculate the site cost, which refers to preparing your land for construction. This could be between $10,000 and $70,000. The large disparity in price is due to the large amount of work done, which varies greatly depending on the area.

The site costs cover tasks such as levelling the ground, excavation, clearing debris, cutting down trees, removing unwanted vegetation, and connecting utilities. Due to the difficulty and amount of work needed to prepare a lot for construction, a flat block typically costs less than a sloping one.

This is one of the biggest hidden costs when building a home. If you’re not prepared, your budget could take a hit.  

Flooring 

The flooring may not be included in the quotation of your builder. Flooring costs are around $20 to $130 per square metre. Price varies based on the materials you use. Laminate flooring can cost $30 to $40 while wooden floors can cost $40 to $100 or more. 

Your house will be built on a concrete slab, and you’ll decide on what kind of flooring you want. Make sure you plan for floorboards, tiles, and carpets. You may also speak to your builder so you can get a quote on your desired flooring. 

Landscaping 

Some may be so focused on the home that they forget to include landscaping in their budgets. A landscaping project could cost 5% to 10% of the home’s value. Landscaping is an integral part of every home construction and can affect the overall beauty and enjoyment of the property.

The more intricate you want your outdoor space to look, the more expensive the landscape costs. When you’re doing a layout of your home, always look at the whole picture. Having a nice lawn or backyard area could really make a difference in your home. 

Driveways 

In addition to the landscape, don’t forget your driveway. This is another area that may not be included in the original home-building quote. The price of making a driveway depends on the type, design, and materials. This could be anywhere between $65 to over $150 per square metre. 

You could save a lot of money by opting for a plainer-looking driveway than one with textured or coloured concrete. Finding creative ways to make it beautiful without spending more can be a challenge, but very possible. 

Land registration 

Land registration fees can cost around $200 to $600, it could be less or more depending on the state or territory and if there are any easements associated with the land. 

If your land is not yet registered, you could incur extra costs for connecting electricity, water, sewage, gas, telephone, and the like. Speak with your builder or real estate agent to check if the location has been registered. If not, ask for an accurate estimation of these costs. 

Building inspection 

To ensure that your home is built to high standards, you must get it inspected by a qualified professional. A building inspection can cost anywhere between $300 and $1,500; it varies depending on the size of the home. 

Building inspections can reveal any issues with the plumbing and electrical wiring, as well as identify any mistakes made during the construction. If the inspection report reveals any problems, you can quickly discuss the next steps with the builder. 

Modifications 

If you want to make a few changes to the original plan during construction, you can expect additional costs to your build. It would account for extra labour, material costs, legal costs, engineering, and penalty costs for modifying the contract. 

Before finalising the building contract, make sure you review the design plan carefully, so you don’t go over budget with modifications. 

Construction insurance 

Construction insurance covers any fire or storm damage that may occur during the building of the home. It could cost between $1,200 to $1,300 or 1.3% of the contract’s value.  

Getting construction insurance on the same day of signing a contract protects you from any accidents that may happen between then and the completion of your home construction. Building a home is an expensive investment, spending a bit more to protect it could be beneficial. 

Loan fees 

Lastly, you need to consider costs such as loan fees, settlement fees, ongoing fees, admin fees, and the like when you take out a construction loan. Every lender has a different set of fees they impose on borrowers. To get the best deal, you need to find a lender that offers minimal fees and low rates. 

If you’re looking to save more on your construction loan, loans.com.au offers great finance options. Check out our range of construction loans to find one that suits your needs best. For more information, get in touch with our friendly lending specialist by calling 13 10 90 or apply online today! 

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