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Before we begin, the costs and prices mentioned in this post are only meant to be a reference. They also vary from location to location and are subject to market factors.

In Melbourne, a house may be constructed for between $1300 and $3900+ per square metre based on actual figures used by builders.

This means the cost of building a home ranges from $350,000 to $700,000, depending on the house’s size, quality, and style. On average, Melbourne residents spent $500,000 in 2022, up from $300,000 in 2017. 

In some Australian real estate markets, house prices have risen steadily over the last ten years, but others saw a decline during the 2019 pandemic.

Investors are turning their focus back to the city to take advantage of housing opportunities after 2023, but slowly but steadily, it is bouncing back.

It is cheaper and less time-consuming to build a house to one’s standards and preferences than to buy a home for sale in Melbourne.

What to consider before you consider building in Melbourne

Before discussing the specifics of house construction, let’s take a moment to discuss some issues that homeowners and investors should consider before starting to swing a hammer.

Investment opportunities

Property is more than just a place you live in; it’s an investment if you choose wisely. Think about your choices from two perspectives: a homeowner who desires to buy and build on the same parcel in the future and a prospective home buyer who wants to live on the same land.

Location, Location, Location!

Besides the standard construction expenses, your spending plan will also be affected by the cost of the land on which your home is built and its location. Try to live in the most suitable Melbourne neighbourhoods based on your needs and budget.

Cost of supplies & materials

Even the cost of supplies can change, and you must consider these spikes and dips in your timeline to maximise your budget.

Quality & expectations

Quality materials will always increase the cost, regardless of their initial outlay. Higher-quality materials require higher finishing and craftsmanship, which leads to higher labour expenses. 

If you want to save money, you should undoubtedly think again about skimping on quality. You may pay more in the long run if you use inferior materials.

Not including luxury materials, intelligent systems, and energy-efficient equipment in initial cost projections can contribute to your bill.

  • Budget materials. To build a 4-bedroom house, you should expect to pay between $1,900 and $3,900 per square metre for a 4-bedroom single-level brick veneer home on a level block, 
  • Mid-range finishes. You can also expect to pay between $2,400 and $3,900 per square metre for a 4-bedroom brick veneer single-level project home on a level block, 
  • Premium finishes. A four-bedroom, full brick two-level home on a level block, You can expect to pay between $2,900 and $3,900 per square metre for an ideal four-bedroom, full brick, two-level residence.

Size of the house

On average, Australian homes are 200 square metres, but new builds begin at 240 square metres. To build a bigger house, materials and equipment must be specially made or procured, as well as more labour. It may also take longer to finish the job unless a larger team is employed.


Complex architectural designs are difficult to imagine and assemble, plus open-plan houses, voids, split levels, etc., may also be more expensive to build.


Access to, storage, and use of machinery are vital for suppliers and builders in challenging-to-access, sloping, or water-impacted locations. However, additional charges may be required to ensure proper support and protection, especially in tight areas.

Regulatory and Insurance Requirements

Before legally building a house in Melbourne, you must obtain a building permit. You may also need one if you want to alter an existing home.

Getting approval from regulatory agencies can be costly, but you may also need to consider the general insurance requirements for constructing a house. Performance and payment bonds, for example, impact the overall building cost. On the other hand, consider the general insurance requirements for constructing a house.

How long does it take to build a house in Melbourne?

During the COVID-19 pandemic, prices have increased sharply, and the time it takes to construct buildings has also extended. 

A renovation that would have taken four months is now taking 6-8 months, and a new build that would have been 6-8 months is now taking 12-18 months. 

This puts a strain on builders who need the cash flow and the customers who may be paying rent for one home while their other home is being built or who have two mortgages. 

Sadly, many construction companies have had to close down after signing fixed-price contracts in the early stages of the pandemic and not being able to finish them. 

It is difficult to answer the question of “how long” as there are too many variables. The current delays in building construction caused by COVID-19 only add to the time taken to build a house and any unexpected events that may arise, such as unfavourable soil.

Should you build or buy a House in Melbourne?

Whether to build a house or purchase a ready-made one depends mainly on the buyer’s time, budget, and preferences. Rather than creating a home from scratch, purchasing a ready-made home saves money and time.

You might be better off looking for a ready-built house in your favourite Melbourne neighbourhood if you have more cash.

Consider hiring one of the best conveyancers in the area to handle the legal aspect of buying a property if that’s the case.

Generally, a conveyancer is a specialist in real estate law who can also handle specific tasks for you. They can, for example, document, investigate, and compute taxes.

More importantly, they check pertinent information affecting your property ownership and represent your interests when talking to a vendor or real estate agent.

If you haven’t already, you must employ a conveyancer when purchasing a house in Melbourne. You may seek recommendations from your family and friends or look online for more information about conveyancers.

Other costs you should consider when building your house. 

You should be prepared to pay more than the usual fees in case of the following issues: 

  • soil quality, 
  • slope of the block, 
  • flood-prone areas. 

You can expect to pay more if your soil is hard to work with, such as 

  • clay, 
  • sand, 
  • rock. 

If your soil is difficult to handle, you can expect to pay more for extra foundations, levelling the site, or retaining walls. 

Flat sites are the easiest to build on. If your block slopes, you may have to pay more for extra foundations or to cut and fill the site (make it flat). 

Flood-prone areas require the dwelling to be raised higher than the regular ground level to handle excessive rainfall or floods, which may add to the construction cost.

Frequently asked questions about building a house in Melbourne

Is it cheaper to buy a house or build one in Melbourne?

Constructing your own house can be more economical than purchasing a pre-existing residence if you are willing to be patient and coordinate the required services. In addition, you can reduce the cost by selecting less expensive materials and finishes.

How much does it cost to build a 4-bedroom house in Melbourne?

An average Melbourne house costs around $500,000 in 2022, up from $300,000 in 2017. In Melbourne, the cost is $350,000, and a home costing $3,000 per square metre is not unusual.

How much does it cost to build a Melbourne house?

Constructing a home includes numerous expenses, from design and arranging fees to the price of materials, labour, fittings and completions. The average cost of building a house in Australia can range from $1300 to $3900 per square metre.

How long does it take to build a house in Melbourne?

During the COVID-19 pandemic, prices have increased sharply, and the time it takes to construct buildings has also extended. For example, a renovation that would have previously taken four months is now taking 6-8 months, and a new build that would have been 6-8 months is taking 12-18 months.

Find out how much your next Melbourne house build will cost

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