Most cost blowouts on a new home are locked in before the slab is poured. Here are the levers you actually control as the owner, and the questions to ask about the ones that are the builder's job.
Saving money isn't about cutting corners. The cheapest house to build is one that's fully decided, simply designed and accurately priced before anyone picks up a shovel.
1. Keep the footprint simple
Every corner, step and change in roof line costs money. A simple rectangular or L-shaped footprint with a straightforward roof (a gable or hip without lots of valleys) uses less material, less labour and has fewer places to leak.
Ask your designer to:
- reduce the number of external corners
- avoid unnecessary changes in wall height and ceiling height
- keep the roof shape simple
- stack or group wet areas (bathrooms, ensuite, laundry, kitchen) so plumbing runs are short
2. Build smaller, and design every square metre to work
Size is the single biggest driver of cost. Every square metre you don't build is one you don't pay for, heat, cool or clean. Look hard at rooms that are rarely used: a formal lounge and a separate dining room, a theatre room, a fourth living area. A well-planned smaller home usually lives better than a big one with wasted space.
3. Use standard sizes and prefabricated components
Designing to standard sizes saves waste and labour:
- standard window and door sizes rather than custom
- room dimensions that suit standard sheet and timber lengths
- standard ceiling heights unless you really want the extra
- prefabricated wall frames and roof trusses, which are faster and more accurate than stick-built
Off-the-shelf doesn't mean low quality. It means you're not paying for something to be made just for you.
4. Understand your site costs before you sign
Sloping land, rock, poor soil, a long service run or a tight block can add tens of thousands of dollars before anything goes above ground. Get the soil test, contour survey and service locations done early so the builder prices the real site, not a guess. The free Before Buying Land checklist is worth running through before you even buy the block.
5. Lock in your selections before you sign
The biggest source of unexpected cost on most builds is decisions made late. If your tiles, tapware, appliances, cabinetry and electrical layout are still "to be confirmed" when you sign, every one of them becomes a potential variation, priced when you have no bargaining power left.
Finish your colour and material selections, electrical plan and kitchen design before signing the contract wherever you can.
6. Watch provisional sums and prime cost items
Provisional sums (PS) are allowances for work that can't be priced exactly yet, such as rock excavation. Prime cost (PC) items are allowances for items you haven't chosen yet, like appliances or tapware. Both are where low headline prices hide.
A builder can make a quote look cheap by setting low allowances. When the real cost comes in, you pay the difference plus the builder's margin. Before you sign:
- list every PC and PS item in the contract
- check each allowance against real prices for what you actually want
- ask what margin the builder adds to any overrun
- ask for the work to be properly priced instead wherever possible
More on this in What is a provisional sum and why you need to know about it.
7. Get a fixed-price contract with a complete specification
A fixed-price contract, with a detailed specification and plans attached, puts the risk of the builder's estimating errors on the builder. A cost-plus contract or a vague specification puts it on you. In Queensland, a domestic building contract must include the plans and specifications, so make sure yours is complete before you sign. If it says "builder's standard range" for half the items, ask what that actually means.
8. Avoid variations once you've started
Every change after the contract is signed is a variation. Variations cost more than the same item would have at the start, because the builder's margin is applied, work may have to be undone, and the program can stall.
To keep them down:
- make your decisions during design, not during construction
- resist "while we're at it" upgrades on site visits
- get every variation in writing, with a price and any time extension, and sign it before the work is done
Read more in Demystifying residential building variations.
9. Spend on what's hard to change later
Value engineering, done properly, means getting the same function for less money. Done badly, it means swapping in cheaper materials you'll pay for later. As an owner, put your money into the things that are expensive or impossible to change after handover:
- the structure, slab and roof
- insulation, wall wrap and moisture management
- orientation, shading and window placement
- waterproofing in wet areas
Save money on the things you can upgrade easily later: light fittings, tapware, door handles, landscaping, even the second bathroom vanity. Think about running costs too. A slightly dearer heat pump hot water system or better insulation can pay for itself in lower power bills.
10. Choose a well-run builder and keep an eye on progress
Many cost drivers are on the builder's side: how well they manage trades and labour, how much they waste, what deals they get from suppliers, and how they schedule work. You can't control those directly, but you can choose a builder who manages them well, because poorly run jobs cost money somewhere. Ask:
- How do you schedule trades, and how many jobs does each supervisor run?
- How do you track costs against budget during the build?
- Do you use prefabricated frames and trusses?
- How do you manage site waste?
During the build, keep your own record of what you've been charged against the contract, and check each stage is genuinely complete before you pay the progress claim. Catching problems early is much cheaper than fixing them after the next trade has built over them. Stage-by-stage inspections using quality checklists help here.
Anthony Painter
Quality with Stage Gates and ITP's
Common questions
Are cheaper materials a false economy? Sometimes. Cheaper materials can mean higher maintenance and replacement costs later. Balance up-front cost against life span, and make sure everything meets the relevant Australian Standards.
Can I negotiate with a project builder? Yes, usually on inclusions and upgrades rather than the base price. Ask for upgrades to be included rather than a discount, and get everything in writing in the contract.
What's the single best way to save money? Finish your design and selections before you sign, and then don't change them.
Further reading
Anthony Painter
