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."
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
$666,670
$24,530.50
$691,200.50
Greater Melbourne
$402,750
$16,507 $0 (first home buyer concession)
$419,257 $402,750
South East Queensland
$417,250
$13,030.50 $0 (first home vacant land concession)
$430,280.50 $417,250
Greater Adelaide
$307,250
$11,695 $0 (first home vacant land concession
$318,945 $307,250
Greater Perth
$328,750
$9,929.40 $0 (first home owner)
$338,679.40 $328,750
ACT
$651,750
$17,957.76 $15,277.76 (owner occupier concession)
$669,707.76 $667,027.76
Sources: UDIA State of the land report 2025, various government stamp duty calculators
Estimating construction costs
Now that we have some rough estimates for land purchases, we also need to find average home construction costs. We can do this with data on average construction costs per square metre and average floor sizes of new houses.
City
Average construction cost ($/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; BMT Constructions Costs (*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
$1,225,860.50
Melbourne
$981,505 $964,998 (first home buyer)
Brisbane
$1,017,049.90 $1,004,019.40 (first home vacant land concession)
Adelaide
$849,414.36 $837,719.36 (first home vacant land concession)
Now we can compare the figures above with the median costs of buying established properties in each city, plus stamp duty.
City
Median property price
Stamp duty
Price plus stamp duty
Sydney
$1,190,616
$48,110
$1,238,726
Melbourne
$781,318
$41,949
$822,428
Brisbane
$899,824
$17,264.50
$917,088.50
Adelaide
$645,721
$39,353
$867,028
Perth
$806,205
$32,639.95
$838,844.95
Canberra
$854,398
$28,359.60
$882,757.60
Source: CoreLogic Home Values Index, April 2025
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.
On average, building a house is cheaper than buying
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
$1,225,860.50
$1,238,726
Building = $12,865.50 cheaper than buying
Melbourne
$981,505 $964,998 (first home buyer)
$822,428
Buying = $159,077 cheaper than building Buying = $142,570 cheaper than building (first home buyer)
Brisbane
$1,017,049.90 $1,004,019.40 (first home vacant land concession)
$917,088.50
Buying = $99,961.40 cheaper than building Buying = $86,930.90 cheaper than building (first home buyer)
Adelaide
$849,414.36 $837,719.36 (first home vacant land concession)
$867,028
Building = $17,613 cheaper than buying Building = $29,308.64 than buying (first home buyer)
Perth
$936,121.48 $926,192.08 (first home owner)
$838,844.95
Buying = $97,276.53 cheaper than building Buying= $87,347.13 cheaper than building (first home buyer)
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. But now building is only the cheapest option in 2 places.
Now these figures are general estimates. 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. Experts are predicting that construction costs will begin reducing this year. 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
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.
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.
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.
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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.
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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.
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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
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