What are the hidden costs in building a home?

Even if you budget for the labour costs and the materials, unexpected costs could still arise. These might include foundational issues, weather complications or changes related to the design. You should allow for a 10-15% buffer on your estimated costs.

What are the additional costs I need to consider when buying land or property?

When you buy land or property you'll need to pay costs like stamp duty. When you're building you may also need to pay for permits and insurances. If you're buying using a home loan then you'll have other costs to think about like government fees and charges.

Is it cheaper to build or buy a house in 2026?

Whether or not it's cheaper to build or buy your house depends on your location and the size of your desired property.
It used to be cheaper to build property in every state and territory, but construction prices have risen drastically.
Estimated costs of either option can change based on whether you're eligible for state schemes.

Is it cheaper to buy or build a house?

Unfortunately there's no easy answer. It used to be fair to assume that building property was the cheapest option, but after construction costs have risen over the last few years that has changed.

The costs of both building and buying will depend on your location and the size and finishings of the property.

Additionally, each state has its own rules on what is eligible for concessions.

We've done a deep dive below at the data to look at what the figures might look like in several of the states.

It's also important to remember that building a house has its own challenges, from long construction times and limited availability of vacant land in established suburbs where people most want to live.

Expert insight: Why building not buying can make sense

"Building a new home can be significantly more cost-effective than buying an existing one. Leveraging various government grants and subsidies specifically for new builds can notably reduce costs, potentially saving you up to $35,000 and up to $100K for more established properties. Additionally, new builds offer the peace of mind of modern design, energy efficiency, and minimal need for immediate repairs or renovations, often making them a more financially prudent choice than established homes."

Shawn Waugh

Director, Stop Renting Perth

Estimating land costs

The first step is to work out the rough cost of land. Here we've used data from the UDIA state of the land report, which covers 6 major metropolitan areas of Australia. Unfortunately we do not have data for Tasmania or the Northern Territory.

We've also factored in stamp duty, including discounts for first home buyers.

City	Median land price	Stamp duty	Total land price
Greater Sydney	$695,000	$25,462	$720,462
Greater Melbourne	$405,375	$19,392.50 $0 (first home buyer concession)	$424,767.50 $405,375
South East Queensland	$488,360	$15,519 $0 (first home vacant land concession)	$503,879 $488,360
Greater Adelaide	$307,250	$11,695 $0 (first home vacant land concession)	$318,945 $307,250
Greater Perth	$377,250	$11,936.75 $0 (first home owner)	$389,186.75 $377,250
ACT	$651,750	$17,957.76 $15,277.76 (owner occupier concession)	$669,707.76 $667,027.76

^{Sources: UDIA State of the Land 2026 report, median lot prices for calendar year 2025 (Greater Adelaide and ACT show 2024 prices from the 2025 report); stamp duty at the general rates published by Revenue NSW, the Victorian State Revenue Office, the Queensland Revenue Office and RevenueWA as at October 2026 (Greater Adelaide and ACT duty not updated)}

Estimating construction costs

Now that we have some rough estimates for land purchases, we also need to find average home construction costs. We can do this with data on average construction costs per square metre and average floor sizes of new houses.

City	Average construction cost ($/sqm)*	Home size (sqm)	Total construction cost
Sydney	$2,280 (per sqm)	234.5 (sqm)	$534,660
Melbourne	$2,280 (per sqm)	246.6 (sqm)	$562,248
Brisbane	$2,394 (per sqm)	245.1 (sqm)	$586,769.4
Adelaide	$2,325.60 (per sqm)	228.1 (sqm)	$530,469.36
Perth	$2,485.20 (per sqm)	240.4 (sqm)	$597,442.08
ACT	$2,416.80 (per sqm)	283.2 (sqm)	$684,437.76

^{Sources: ABS Building Activity, December quarter 2024; BMT Construction Costs, 2025 (not updated) (*pricing for a medium-quality, 3-bedroom brick home, with regional cost variation factored in to the total construction cost)}

Total cost of building and land

Now we can combine the land and house construction estimates (and stamp duty) on vacant land to work out the full cost of building a house.

City	Total cost of land and construction
Sydney	$1,255,122
Melbourne	$987,015.50 $967,623 (first home buyer)
Brisbane	$1,090,648.40 $1,075,129.40 (first home vacant land concession)
Adelaide	$849,414.36 $837,719.36 (first home vacant land concession)
Perth	$986,628.83 $974,692.08 (first home owner)
ACT	$1,354,145.52 $1,351,465.52 (home buyer concession)

Cost of buying an established home

Now we can compare the figures above with the median costs of buying established properties in each city, plus stamp duty.

City	Median dwelling value	Stamp duty	Price plus stamp duty
Sydney	$1,198,596	$48,124	$1,246,720
Melbourne	$780,550	$41,903	$822,453
Brisbane	$1,048,880	$40,836.75	$1,089,716.75
Adelaide	$928,560	Not updated	Not updated
Perth	$975,022	$41,333.15	$1,016,355.15
Canberra	$854,398	$28,359.60	$882,757.60

^{Source: Cotality (formerly CoreLogic) Home Value Index, median dwelling values at 30 September 2026 (Canberra row: April 2025). Stamp duty at the general rates as at October 2026 (Canberra: 2025 rates). We couldn't access South Australia's current duty rates for this update, so Adelaide's stamp duty and total aren't shown.}

The stamp duties listed here are without considering any schemes. Many states provide stamp duty relief or concessions for first home buyers and the ACT has reduced rates for owner occupiers. You should check the stamp duty information for your state or territory.

Building vs buying: how the total costs compare

Now that we’ve crunched the numbers, let’s have a look at how the median costs of building stack up to the median costs of buying. All costs include stamp duty. The cost of building includes land purchase and assumes a first home owner concession on stamp duty where applicable.

City	Building	Buying	Difference
Sydney	$1,255,122	$1,246,720	Buying = $8,402 cheaper than building
Melbourne	$987,015.50 $967,623 (first home buyer)	$822,453	Buying = $164,562.50 cheaper than building Buying = $145,170 cheaper than building (first home buyer)
Brisbane	$1,090,648.40 $1,075,129.40 (first home vacant land concession)	$1,089,716.75	Buying = $931.65 cheaper than building Building = $14,587.35 cheaper than buying (first home buyer)
Adelaide	$849,414.36 $837,719.36 (first home vacant land concession)	Not updated	Not compared: South Australian stamp duty couldn't be updated
Perth	$986,628.83 $974,692.08 (first home owner)	$1,016,355.15	Building = $29,726.32 cheaper than buying Building = $41,663.07 cheaper than buying (first home buyer)
Canberra	$1,354,145.52 $1,351,465.52 (home buyer concession)	$882,757.60	Buying = $471,387.92 cheaper than building Buying = $468,707.92 cheaper than building (first home buyer)

In 2021, building was the cheapest option for every city apart from Perth. On these figures, building is now cheaper only in Perth, and in Brisbane for first home buyers who qualify for the vacant land concession. Adelaide isn't compared because we couldn't update South Australian stamp duty, and the Canberra figures are from 2025.

Now these figures are general estimates. Land prices and home values are mostly 2025 to 2026 figures (see the notes under each table), while construction costs are the latest available (ABS December quarter 2024 and BMT 2025), so treat the totals as a guide only: small differences, like Sydney's, can flip as prices move. They also don't take into account finishing costs for new construction. There could also be substantial variations depending on where you live and the availability of land packages and skilled labour. Some of this data may also go out of date very quickly, as the economic environment changes quickly. But as a general guide, the table above shows that building and buying stack up very differently in different capital cities.

Deciding whether to build or buy?

The building versus buying decision is not just about cost.

While the cost of building versus buying is easily quantifiable, the decision has more to do with the kind of home and home-buying experience you're looking for.

Let's look at some pros and cons for both options.

Building a home

Pros

When you build a home you get the ability to customise it according to your preferences, and you can choose materials and fixtures to suit your requirements.
Some lenders offer home construction loans which enable you to get funds in stages, as opposed to a lump sum amount.
In addition, you do not have to worry about old plumbing, wiring and appliances breaking down for a while.

Cons

Building a home can take considerably longer than moving into an already-constructed home. While a number of builders offer fixed-price contracts with build-time guarantees, take into account that certain council approvals can take time depending on what you have in mind. It also pays to factor in unexpected delays thanks to inclement weather.
Choosing a good contractor requires you to do some research, because a faulty or incorrectly built section can take more time and money to repair.
If you plan to have a garden, it can take years before the trees mature completely.

Buying a home

Pros

Buying a home is convenient, compared to building. All you need is loan pre-approval and to look for homes that fit your budget. Once you sign on the dotted line, you can start preparing to move.
Buying a home can also offer you more options in terms of locations, given that empty lots are not particularly easy to come by in neighbourhoods that have been around for a while.
Many homes also come with landscaping.

Cons

One of the biggest downsides to buying an established home is that you may not be able to renovate or modify it in the way you desire, and it's often not easy to find a home that matches your specifications down to the last detail.
Buying a home can also require you to spend money for repairs or to fix it up. You might not account for all these expenses when taking out a home loan, resulting in an added financial burden down the line.
Old homes require a thorough inspection of plumbing, wiring and fixtures before you decide to purchase them.

Frequently asked questions

Finder writers are subject matter experts and use primary sources, in-depth research and interviews with other experts to ensure you're getting accurate, up-to-date information. Articles are fact checked in line with our editorial guidelines.

Thank you for your feedback!

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Richard Whitten

Senior Money Editor

Add to Preferred Sources

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 764 Finder guides across topics including:

Home loans
Credit cards
Personal finance
Money-saving tips

Co-written by

Rebecca Pike

Editor, Money

Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines. See full bio

Rebecca's expertise

Rebecca has written 253 Finder guides across topics including:

Home loans
Personal Loans
Car Loans
Cost of living
Budgeting

More resources on Finder

Ask a question

Click here to cancel reply.

Display name

Your email (will not be published)

Your question

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms Of Service and Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

2 Responses

DaleOctober 5, 2018

In some locations, new homes are approx $100k more expensive than existing homes to buy. Would you expect this gap (100k) to narrow over time? If yes, how long long or when do existing homes sell for the same price of new homes?

Thanks

Finder

MayOctober 7, 2018Finder

Hi Dale,

Thanks for your question.

Well, we can’t really tell if the $100K gap would reduce or narrow overtime as it would greatly depend on the market. Other factors would also affect, for instance, the cost of construction. Not only that, we won’t be able to know if how much stamp duty will be imposed on newly established homes versus those that are newly built in the future. Stamp duty on properties would vary per state though.

Hope this helps.

Cheers,
May

More guides on Finder

What you need to know about real estate underquoting
This guide discusses what underquoting means, how it works and how you can protect yourself from agents using this tactic.
Should you rent or buy?
Are you still renting but have been thinking about buying? Find out what you'll need to know in the great debate of renting vs buying.
Should I make a pre-auction offer on a property?
A guide to making a pre-auction offer, how to do it properly, when to do it and when not to do it.
What is a Section 32 or Vendor’s Statement?
We run through Section 32 statements and talk about what important facts are contained in these documents.
What is a Section 173 Agreement?
A Section 173 Agreement is a contract between a local council and a landowner about what can be done with the land. If you own property in Victoria, learn about how Section 173 Agreements work here.
Sinking fund and strata properties: What you need to know
A sinking fund is an essential financial plan for any strata scheme, allowing the owners’ corporation to set aside funds for future capital expenditure.
What does “under contract” mean?
The words “under contract” don’t necessarily mean that a property sale is a done deal. Find out more about this term here.
Rent to buy schemes
Owning a home through a typical rent to buy scheme is often described as a scam. But this may be changing, at least in Victoria.
Buying at auctions – expert tips to come out on top
Auction tips for buyers: arm yourself with insider strategies so you can negotiate and out-bid the competition when buying a property.
Joint home loan: Tips for co-buying property
A joint home loan could be your ticket to home ownership with a spouse, friend, relative or partner. Learn more about joint home loans and compare offers today.

Is it cheaper to build or buy a house?

Rising construction costs have meant the balance has shifted in favour of buying a house in most areas.