How Much Should You Budget Per Square Metre For A New Home?
If you’ve decided you’d like to build a custom home, you might be wondering how much you should budget per square metre.
You might also think that choosing a builder is as easy as asking, “What’s your square metre rate?”
Unfortunately, it’s not that simple. And if another builder tells you that it is, that should serve as a big red flag.
It’s impossible for a builder to know the square metre rate of a house without knowing its size and what will be included inside.
However, there are a few key indicators that dictate the price per square metre for a new custom home.
In this article, I will share with you the secrets behind a professional builder’s method for determining square metre rates, and why you need to be on high alert if a builder gives you a flat rate no matter the size of the house.
Getting An Idea
At Stannard Family Homes, we work off a comprehensive document that outlines the price per square metre based on 25 square metre increments.
For example, we can very accurately estimate the price of a house between 250 square metres and 275 square metres within 5% accuracy.
The same applies for a home that is between 275 square metres and 300 square metres. Ditto for a house that is between 300 square metres and 325 square metres.
The reason that professional builders work within these parameters to determine the estimate for your new house is because the floorplan and inclusions will be only slightly different between houses in these area brackets and therefore it is easy to estimate the price.
Another key part to determining the square metre rate for your new home is the size of your property.
Depending on how big you would like your new home, the square metre rate will (in most cases) decrease as the house becomes bigger. This is because the additional area will likely be empty space.
If you want to build a small, condensed house, it will contain the expensive parts of the house in a condensed format e.g. the kitchen, bathroom and laundry.
However, as the house gets bigger, the space that is being added onto the house is cheaper because it is less likely to contain luxury features and inclusions.
As a house increases in size, the areas tend to be opened up with empty space that doesn’t cost as much to build.
So before you can apply any credibility to a square metre rate, you must know what size home you intend to build.
Once you do that, you can ask your builder to determine the square metre rate based on the 25 square metre increments that they will already have estimated.
Consider Your Inclusions - Don’t Be Blindsided
Another thing to consider when determining how much to budget for your new home, is the standard inclusions and what additional features you want to include in your house.
As mentioned earlier, the square metre rate for a house will decrease as the house gets bigger, but this is only the case if the standard inclusions don’t increase with the size…
Inclusions play a big part in understanding the budget for your new home because the price will vary greatly if you’re just adding empty space to individual rooms versus adding basins or marble benchtops for example.
You should understand what size you would like your house to be and what inclusions you would like to include before asking a builder to provide you with an accurate estimate for your home based on a square metre rate.
Volume builders might advertise that their square metre rate is $1,200, whereas a custom home builder might advertise their square metre rate at $1,500.
The difference is that volume builders apply cheeky tactics to reel you in at this lower price point, and then sting you for the $300-plus difference with the inclusions that they don’t include in this price.
I once had a client who came to us after visiting a volume builder showroom. They were told that the square metre rate to build a new home didn’t change between a 200m2 plan and a 400m2 plan…
They couldn’t believe how simple it sounded! Until they realised that this was only a base rate and they needed to pay additional costs for all of the inclusions and the site test to determine whether or not these prices would even be applicable to the land.
By the time they analysed what the house would actually cost them, they realised it was going to be more than double the price compared to building a brand new custom home with an independent builder.
Don’t get caught out.
Take Your Time, Do Your Research
People often like to take the easy option and have a short answer for everything, but when it comes to determining a budget per square metre for a new home, it's important that you do your research and give your builder as much information as possible so they can provide you with the most accurate estimate.
Designing a new home can be very overwhelming and when you hear new things for the first time, it's not easy to remember everything.
Which is why I’ve put together a quick guide for you to download - The 7 Things You Must Know Before Designing A New Home.
It’s completely free, and it will help you to avoid any nasty surprises that can sneak up on you when building a custom home.