Budgeting for a New Home Build: A Guide

Budgeting for a new home build can be a daunting task, especially as a first home owner. Many land purchasers underestimate the various costs that are involved with building a home, such as the land and construction costs, and as a result, find themselves facing surprise costs upon completion of the home. 

To avoid placing unnecessary pressure on your finances, it’s crucial to understand what goes into budgeting for a new home build. This guide will provide an overview of the key considerations when creating a budget for a new home, as well as what costs should be accounted for when you’re building a new home.

The importance of a budget when building a new home

With building costs rising all across Australia due to shifts in the market for labour and construction materials, it’s not unheard of for builds to exceed their estimated costs by 10-20%. Adding to this, surprise issues arising throughout construction, such as poor soil quality or resource shortages, can often raise costs further.

While a budget won’t account for every unknown factor, it is still the best way to prepare and plan when building a new home. Having a budget provides a basis on which to decide the size, layout, and other aspects of your future home.

Considerations while creating a budget

There are several key considerations to keep in mind when creating a budget for a new home build: 

• The main goal of your budget – figuring out what costs it will cover
• Any non-negotiable elements to include in the new home build
• Inclusions and exclusions that apply with the chosen builder
• The amount of financing available (with pre-approval)

Having as much confirmation of the above considerations will help to solidify a budget with confidence. It’s also important to remember that while builders will often provide an estimate of the costs involved, the actual costs involved can vary significantly, so you’re better off using these quotes as a guide, rather than take them at exact dollar value.

What should be included in a new home build budget? 

Building a new house will incur costs that can vary from state to state, from builder to builder. The costs involved in a new home budget will typically fall into the following categories: 

Land costs

The land a new home will sit on will usually come as a separate cost, unless it has already been included in the case of a house and land package. The cost of land is affected by size and location, and is an essential cost that should be included in a new home budget.

Site preparation costs also fall under this category. Depending on the nature and condition of the soil on the plot of land, it may need to undergo additional preparation to provide a stable and proper foundation for the home construction. 

Construction costs

Construction costs account for the builder’s work in putting the new home together. Such costs may be included in a building package or included as separate costs for materials and labour, so it’s important to clarify with the builder as to whether they will need to be accounted for in the new home build budget.

Permit fees 

Each state in Australia has its own requirements for building a home, along with specific building and development permits that will need to be applied for and obtained as part of the home building process. Considering that the cost of applying for these permits can add up to quite a sum, they should be included in the budget for the home build. 

Additional costs 

Home builds are large-scale projects with many moving parts, and it’s more than likely that some additional expenses will be incurred along the way, whether due to late-stage modifications to the home or due to a material shortage. In any case, it’s a safe option to include a buffer of 10-20% in a new home build budget for such allowances.

Build your dream home with John Munro Builder

Building a budget is an organic process that can change throughout the new home build planning process. Speaking to an experienced builder is a good starting point for understanding the different elements that will form the budget for a new home. 

If you are considering building a new home in North QLD, John Munro Builder is a leading Townsville home builder trusted by local residents for high-quality, well-designed homes. We can provide expert advice that will inform your new home build budget and help you create your dream home.