Cost is the question every prospective home builder asks first, and it's the hardest to answer accurately without knowing the specifics of your site, brief, and finish level. But there are reliable frameworks for understanding where your money goes and how to budget with confidence.
This guide covers construction costs, the additional costs many builders omit from their initial quotes, and how Varcon approaches pricing to ensure you have a true picture from the start.
Construction Cost Per Square Metre
The most common benchmark for construction cost is the price per square metre (m²) of floor area. In Victoria in 2025–2026, the broad ranges look like this:
- Volume/project homes: $1,500–$2,200/m², mass-produced designs with limited customisation
- Custom homes (mid-range): $2,500–$3,500/m², bespoke designs with quality finishes
- Luxury custom homes: $3,500–$6,000+/m², high-end materials, complex architecture, premium trades
These are construction costs only, they don't include land, site costs, professional fees, or landscaping. The per-square-metre figure is a useful sanity check but should never be used as the sole basis for a budget.
What's Typically Not in the Build Price
Many builder quotes present a 'house price' that omits several significant items. Understanding these exclusions is essential to accurate budgeting:
Site Costs
As covered in our site costs article, these include soil testing, earthworks, retaining walls, and service connections. On challenging sites, this alone can add $50,000–$200,000+ to your total project cost.
Professional Fees
Architect fees typically run 8–12% of construction cost for a full-service engagement. Engineer, town planner, interior designer, and building surveyor fees add further to this. Budget $50,000–$120,000 for professional fees on a $1–$2M custom home.
Landscaping and Externals
Driveway, fencing, gates, pools, garden design, and irrigation are almost never included in a building contract. Landscaping for a quality custom home can range from $50,000 to $250,000+.
Finishes and Selections Upgrades
Base inclusions in even premium builder contracts often fall short of what clients expect. Kitchen joinery, stone benchtops, bathrooms, and flooring selections can cost considerably more than the standard allowances, sometimes adding 10–20% to the contracted price.
Finance and Holding Costs
Construction loans typically have higher interest rates than standard mortgages during the build period. You may also be paying rent or mortgage on your current home simultaneously. Factor 12–20 months of holding costs into your budget.
Hidden Costs That Surprise First-Time Builders
- Bushfire Attack Level (BAL) compliance, if your site is bushfire-prone, additional construction requirements apply
- Heritage conditions, additional design constraints and materials requirements
- Connection upgrades to utilities, older areas often require mains upgrades at your cost
- Asbestos removal, required for any pre-1990 demolition
- Body corporate fees if your land is on a strata plan
The True Cost of a Luxury Custom Home in Melbourne
For a genuine, high-quality custom home in metropolitan Melbourne with a thoughtful design, quality finishes, and properly managed construction, the all-in cost (excluding land) for a 400–500m² home typically falls in the range of $1.8M–$3.5M depending on architectural complexity, site difficulty, and finish level.
Varcon's approach is to present clients with a complete project cost estimate, not just a building price, so you can budget with clarity and confidence. We believe informed clients make better decisions, and better decisions lead to more successful outcomes for everyone.
