Before you sign with a builder, it pays to know roughly what your home should cost. A good estimate lets you test a builder's quote, spot what's missing, and decide early whether that second living area is worth it. Here's how to build a sensible estimate, and what a builder's quote should include.

Start with three things: a one-paragraph description of what you want built, a target floor area in square metres, and what you know about the site (slope, access, services and soil).

a calculator sitting on top of a table next to a laptop
Photo by Jakub Żerdzicki / Unsplash

Estimates get sharper as the design develops

You'll estimate more than once:

  • Concept: a rough rate per square metre to see if the size fits your budget.
  • Sketch design: floor plans and an outline specification. Price the big-ticket items (slab, frame, roof, services) separately.
  • Working drawings: measured quantities and trade quotes. This is where a quantity surveyor (QS) or your builder's estimator earns their keep.
  • Contract: the builder's fixed price, plus any PC items and provisional sums.
  • During the build: track variations against the contract price so the total stays visible.

Don't expect concept-stage accuracy from a concept-stage number.

How to calculate it

1. Start with a rate per square metre

Multiply the floor area by a local rate per m2 for a similar home. Recent quotes for similar homes in your area are the best source. Published guides like the Rawlinsons Australian Construction Handbook and Cordell cost guides, or a QS, can help. Count garages, alfresco areas and verandahs separately, as they cost less per m2 than living areas.

This is a starting point only. It's poor for unusual or complex designs.

2. Check it with a second method

Break the job into elements (site works, slab, frame, roof, windows and doors, services, linings, wet areas, kitchen, finishes) and price each one. For the big items, measure quantities and multiply by a unit rate: cubic metres of concrete, square metres of plasterboard or roofing, lineal metres of wall. If the two methods disagree badly, find out why.

3. Add everything else

This is where homeowners get caught. A Queensland build will usually also include:

  • Site costs: soil test, contour survey, excavation and fill, retaining walls, rock removal, and connections to sewer, water, stormwater and power. A sloping or rocky block can add tens of thousands.
  • Preliminaries: temporary fencing, site toilet, skip bins, temporary power, scaffolding and supervision.
  • Design and approval costs: drafting or architect fees, engineering, energy rating, building certifier fees, and council and water authority fees.
  • QBCC Home Warranty Insurance premium: required for residential work over $3,300.
  • Portable Long Service Leave levy (QLeave): payable on building work of $150,000 or more.
  • Builder's overhead and margin.
  • GST at 10%.
  • Contingency: 10 to 15% while the design and soil are still unknown, reducing as things are locked in.
  • Escalation: if the build is a year or more away, allow for price rises.

Things a builder's price often leaves out: landscaping, driveways, fencing, letterbox, window coverings, flooring upgrades, and appliances you supply yourself. Ask.

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List every allowance in your contract with a dollar amount and brand/spec range—this is the easiest way to avoid disputes and cost overruns.

PC items and provisional sums

Prime cost (PC) items and provisional sums (PS) are allowances in your contract for items not yet selected or work that can't be priced yet. A PC item might be your tapware or oven. A provisional sum might cover rock excavation or the driveway. If the real cost is higher than the allowance, you pay the difference plus the builder's margin.

Low allowances make a quote look cheaper than it is. Check every allowance against the products you actually want, and get brands, models and quantities in writing. More on provisional sums here and standard allowances here.

What moves the price most

  • The site: slope, rock, groundwater, poor soil, access and distance to services.
  • The structure: long spans, high ceilings, steel beams, suspended slabs and two storeys.
  • The shape: corners, steps in the walls and roof, and premium cladding all add cost.
  • Wet areas: each extra bathroom adds plumbing, waterproofing, tiling and fittings.
  • Size: small homes often cost more per m2, because kitchens, bathrooms and fixed costs get spread over less area.
  • The market: busy periods mean higher trade rates and longer lead times.

Pick your three biggest cost drivers and test a cheaper alternative for each. One design change can reset your budget.

Common traps

  • Scope creep: "while we're at it" adds work without adding budget.
  • Thin allowances: low PC items and provisional sums turn into variations.
  • Trusting a rate per m2 for a complex design.
  • Ignoring site works until the soil test comes back.
  • Incomplete plans: if it isn't drawn or specified, it isn't priced.
  • No change control: every variation should be priced, approved and signed in writing before the work is done.

Why two builders' prices differ

Usually it's different scope, different allowances, different site cost assumptions or different margins. Sometimes one builder is just more efficient. Ask each builder for an itemised breakdown so you can compare line by line, and check what each one has excluded. The cheapest quote often has the most left out. Our C4 Asking the Right Questions checklist on the Checklists page covers what to ask.

The short version

  1. Write down your scope and target floor area, and learn what you can about the site.
  2. Multiply the area by a local rate per m2 as a baseline.
  3. Cross-check with an element-by-element estimate for the big items.
  4. Add site costs, preliminaries, fees, insurance, the QLeave levy, margin, GST and contingency.
  5. Check every PC item and provisional sum against what you actually want.
  6. Compare quotes line by line, not just on the bottom number.
  7. Keep tracking variations against the contract price during the build.

Common questions

Do I need a quantity surveyor? For a straightforward home, a careful estimate and two or three detailed quotes will get you close. For a custom design, a tight budget or a difficult site, a QS is worth the fee.

How much contingency should I carry? Around 10 to 15% early on, dropping to about 5% once selections and soil conditions are known.

Can I trust online cost calculators? As a starting point only. Validate with local quotes.

Further reading

Can You Negotiate a New Home Construction Contract?Learn how to navigate base prices, lot premiums, and closing costs to secure the best deal on your dream home.21 Tips to Save Thousands on Home ConstructionExplore these 21 practical tips to save thousands on your home construction project. From selecting the right site to conducting thorough inspections and choosing cost-effective materials, each tip is designed to help you avoid costly mistakes and make informed decisions.The Importance of Contract Administration in Home BuildingBuilding a dream home? An experienced contract administrator is your advocate, ensuring that every detail aligns with your vision. From overseeing plans to resolving issues, discover how they can turn your construction journey into a smooth adventure.Building Your Dream Home: Balancing Time, Cost, and QualityBuilding a new home can be both exciting and challenging. To ensure success, it’s important to balance the “holy trinity” of project management: time, cost, and quality. In this article, we’ll explore how you can achieve this balance and create your dream home