How much does it cost to build a house in Sydney?

The average New South Wales house size is 239.4sqm, according to Australian Bureau of Statistics data, which makes the cost of building a new home in Sydney anywhere from $562,590 to $1,723,680.

Sydney, New South Wales, Australia

Cost of building a house in Sydney

One of the biggest factors in determining the cost of a new house build is the number of bedrooms incorporated into the home design, as prices are calculated on a per square metre basis.

Domaine Homes sales and marketing manager Nick Allan said a single storey home will cost about $350,000, while a double storey home will be priced at about $500,000.

“They are entry point but you can spend double that depending on size and level of finish but majority are around these prices at the moment,” he said.

A three bedroom house build in Sydney will likely come with a price tag of between $402,500 and $1.26 million.

Meanwhile, a two bedroom house will cost about $276,000 to $864,000 to build a two-bedroom house.

A four bedroom house build in Sydney will cost somewhere in the range of $598,000 to $1.872 million.

Cost of building a single storey or two-storey home in Sydney

Adding a second level to a home build comes with a higher cost mainly due to things such as scaffolding, facades rather than the volume of materials as that doesn’t really change, Mr Allan said.

“You’ve probably got extra bracing on the ground floor of a two storey home.”

A single storey home starts at approximately $$350,000, Mr Allan said, but if you want air conditioning, add a driveway and some basic landscaping, it will rise to $400,000.

“If you did a double storey, of a similar size home, you add about $50,000,” he said.

“Most people do that when the when the land becomes more expensive and the lot sizes are much smaller, they probably have to spend a little bit more.”

Mr Allan said there has been a real shift in building two storey homes in recent times because land sizes in Sydney are so tight.

“I'd say 80% would be double storey, whereas the rest of New South Wales is probably sitting at about 80% single storey and 20% double storey.”

Other factors that impact the cost of building a home in Sydney

There were many elements that contribute to the cost of building a house, which many people sometimes fail to take into consideration, Mr Allan said.

Build time and where to live while it takes place

While one builder may take 12 months to finish a build, some might only take six months but during the build period people also need to rent somewhere to live as the house takes shape.

“And they have different drawdown schedules from the bank, and of course, you already have to be paying a mortgage on the land, and have to service that debt per an additional six months and so every week, you have to factor what are you paying in rent, debt and servicing the mortgage,” Mr Allan said.

Customising your home design

If you build with a project builder, project homes tend to be much cheaper because the builders get economies of scale.

However, changes to a project home design comes at a cost and sometimes at a premium, Mr Allan said.

“So the trick is, if you want to build officially, stick to the base design that was originally costed for the home,” he said.

The size of the floorplan

The larger the floorplan, the more materials needed and hence the bigger the cost.

The average size of a new house in New South Wales is 235sqm, which is also the average Australian new home size of 235.8 sqm, according to a Commsec report. 

Choosing your finishes

Some people when they build, sign a contract and pay a deposit before going through the colour selection process for things such as tapware, cabinetry, colour selections etc, Mr Allan said.

To avoid a big budget blowout, he said it was best to choose a builder who allowed all these selections to be made prior signing a contract so you know exactly what you are going to spend.

Site works

Soil, needing splits or step downs due to a sloping block are all additional costs to building a new home in Sydney.

“When you look for land, you want to buy flat land,” Mr Allan said.

“The other thing is, if your soil classification is challenging you'll need to spend a lot extra on the rigidity of your slab.”

Transfer duty

This is calculated on the value of the property or land you buy. Buying land and building, rather than an established home, will save money.

Government grants available for new homes in Sydney

There are several extra considerations to factor into your planning when it comes to considering the cost of building in Sydney.

First Home Owner Grant

Eligible first home buyers who build or buy a new home valued up to $750,000 can receive $10,000.

The grant system’s eligibility is for first home builders who purchase vacant land and sign a building contract with a builder.

The value of the vacant land plus the value of the home building contract plus the cost of any building variations cannot exceed $750,000.

First Home Buyer Assistance Scheme

An exemption on transfer duty for vacant land valued up to $350,000 and a concessional rate of transfer duty for land valued between $350,000 and $450,000 is available as part of this scheme..

HomeBuilder

This initiative provided a $25,000 grant towards new houses for eligible contracts entered into between 4 June 2020 and 31 December 2020 and $15,000 for new contracts entered into between 1 January 2021 and 31 March 2021.

While HomeBuilder is not applicable to contracts entered into after those timelines, the deadline for submitting the documents to claim the grant has been extended to 30 June, 2025.