We explore how the cost of building a house in Sydney breaks down, as well as what factors you’ll need to consider when calculating the final price of building a home.

It costs between $2,300 and $7,200 a square metre to build a house in Sydney, according to recent Australian construction industry research.

That means a typical Sydney house would cost between $550,620 and $1,723,680 to build, based on the NSW state-wide average new house size of 239.4sqm.

This easily makes Sydney the most expensive capital city in Australia in which to build a home.

Cost to build a house in Sydney – per number of bedrooms

One of the main factors impacting how much it costs to build a home in Sydney is how many bedrooms you choose to include.

Buildings are usually costed on a “per square foot” or “per square metre” basis. So, generally, the bigger the home, the more you’ll have to pay.

That said, there can also be a wide variation in the cost per square metre to build, depending on whether you opt for a project home or fully architect-designed residence.

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How much it costs to build a home in each state

Many people opt for a project home that they then make customisations to, bringing down major build costs while personalising the property to their wants and needs. Picture: The Bannaby Avoca design from Allcastle Homes. realestate.com.au/new-homes

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Cost of a 3-bedroom house in Sydney

It costs anywhere between $402,500 and $1.26 million to build a standard three-bedroom home of 175sqm. However, this is much smaller than the standard new home size build in NSW of 239.4sqm.

Cost of a 2-bedroom house in Sydney

It costs roughly $276,000 to $864,000 to build a two-bedroom house in Sydney. That’s assuming a standard-sized two-bedroom house of 120sqm.

It’s worth noting that few new houses in Sydney tend to be two-bedrooms, with larger houses far more common. Instead, this is a more common configuration for apartments, villas or townhouses.

Cost of a 4-bedroom house in Sydney

It costs anywhere from $598,000 to $1.872 million to build a four-bedroom home in Sydney. This range assumes a standard four-bedroom home with two bathrooms (or even two bathrooms and an ensuite).

Cost of a 5-bedroom house in Sydney

It costs anywhere from $690,000 to $2.16 million to build a standard five-bedroom home of 300sqm. The top end of this price range could buy you something quite luxurious.

How much does a second storey cost in Sydney?

In Sydney, it can cost up to $800 per square metre extra to build a two-storey home compared with a single storey home of the same total floor area. This is due to several factors.

1. Foundation and roof costs

• In a single-storey house, the entire 200sqm are spread out horizontally, which means a larger foundation and roof area are needed.
• In a two-storey house, the home’s footprint is usually reduced by 50%. So, while the foundation and roof area are smaller, the cost is redistributed to structural elements like staircases and reinforced walls.

2. Structural requirements

• A two-storey house requires stronger structural supports, additional load-bearing walls, and sometimes deeper foundations to support the extra weight of the second floor.
• This typically adds about 10-20% more to the construction cost per square metre compared to a single-storey home.

3. Construction complexity

• Building a two-storey house generally involves more complex construction processes, like scaffolding, and may require more time, skilled labour, and safety measures, which further increase costs.

Is it cheaper to build or to buy in Sydney?

It is often cheaper to build a house than buy one in Sydney, but that’s not always the case. To calculate whether that is the case for you, you should add up a range of costs, including:

• The value of the land. The average cost of vacant land in Sydney is $641,250, according to one report. However, depending on where you buy you may have to pay far more, especially in established suburbs.
• The cost of building. Again, this can vary greatly depending on the size of your home and whether you go for a house and land package deal, a bespoke architect-designed home or something in between.
• Transfer duty. Transfer duty is calculated on the value of the property or land you buy, which means that buying land and building, as opposed to buying a completed house, can save you money.
• First homeowner grants and schemes. The NSW First Home Owner (New Homes) Grant provides $10,000 to eligible first home buyers who buy or build a new home. If you’re buying an existing house the threshold for this scheme is just $600,000. However, if you buy and build your own home it increases to $750,000 (the value of the house and land combined).
• Other costs. You may also have to factor in other potential costs if you’re building. These might include site preparation and surveying costs, design and approval fees, utility connections and landscaping. You may also need to factor in the cost of temporary accommodation while the house is being completed.

Factors affecting building costs

The cost to build a home is usually influenced by six key factors.

1. Size of home

The average home in Australia has 3.1 bedrooms, is 195.8sqm in size and sits on 770sqm of land, according to Commsec report.

At 239.4sqm, the average size of a new house built in NSW is much larger. That also means it will generally cost more to build.

After all, a bigger home with more bedrooms needs more construction material and takes longer to build, resulting in higher labour costs, too.

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There are many factors that impact the cost of a build, from single or double storey, through to the design fixtures and finishes you choose. Picture: The Bannaby Avoca design from Allcastle Homes. realestate.com.au/new-homes

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2. Quality of materials

Construction materials, finishes, fixtures and fittings can have a massive impact on the price it ultimately costs to build a home.

3. Site considerations

It usually costs a lot less to build on a flat block of land with easy access. But other factors, such as the type of soil, zoning and planning restrictions can have a real impact too.

If the builder can’t easily get heavy machinery onto the site, it can also have a real impact on budget.

4. Unforeseen delays

Building a home is a major project with many moving parts. A weather delay or a delay in receiving materials can have a real impact on how that project progresses, as well as the costs. 

The cost of delays can really start to add up, especially if it means the teams can’t be on site when it’s most efficient.

If you’re renting a home to live in while your house gets built, you’ll generally need to rent for longer and may even have to find a new rental if your lease expires. This can also have a real impact on costs.

5. Design complexity

Simple designs tend to be cheaper and quicker to build. Project homes are often also much cheaper because the builders get economies of scale.

Because of this, changes to the original plans can add disproportionately to the cost of building.

“Volume builders” (ie: project home builders) also often have standard inclusions when it comes to fixtures and fittings, such as a bench tops, appliances, flooring and painting. So, when you change these, it can impact the price too.

6. Additional expenses outside of building costs

The price of building usually won’t include extras such as landscaping, fencing, swimming pools and local council costs. These can sometimes add tens of thousands of dollars to the price of a build. 

Do I need a contingency buffer? How much should it be?

You should always have a contingency set aside for any building project, because there are likely to be unforeseen expenses. A good guide is to have between 5% and 10% of the build price set aside, just in case.

The more complex the build, the more likely it is that something could go wrong. So, if yours is a bespoke design or one with significant modifications, you should be at the higher end of this range.

How long does it take to build a house?

It can take anywhere from about four months to a year to build a house in Sydney – and that’s once you’ve bought the land and locked in your plans.

Remember that during this time, interest rates can fluctuate, so if you haven’t locked in your mortgage interest rate, you should make sure you’re in a position to meet any rise in your home loan repayments. This can be especially important if you’re building an investment property or in the hope to achieve a profit.

Government grants available for new homes in Sydney

Below is a list of some of the more common government grants available for new homes:

1. First Home Owner Grant (New Homes) Scheme

This scheme provides $10,000 to eligible first home buyers who build a new home valued up to $750,000.

More on the First Home Owner Grant Scheme.

2. First Home Buyer Assistance Scheme

This scheme provides 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.

3. HomeBuilder

HomeBuilder 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 it doesn’t apply to contracts entered into after then, the deadline for submitting the documents for a claim for the grant has been extended to 30 June 2025.

Want to find a builder in your area? Browse our New Homes building section.