How Much Should I Budget for a Starter Home? Sydney is a population of more than five million people, but it seems they are packed with a small radius within the central business district, Harbour Bridge, and North Bondi. But it doesn’t stop people from moving into the city because of the opportunities, sights, education system, and strong economy. There are nearly 2 million private dwellings in Sydney but developments today are fanned out toward the suburbs. There is no other way to create a structure in the CBD but up.
Sydney is also the most expensive place to build a house. For instance, in 2018, the price per square meter of a private dwelling in Sydney shot up to A$76,919, with an average price increase of around $18,000 since 2014. Buying a house in the central business district would be out-of-reach for first-time homeowners on a budget, as the median house prices there are well over a million dollars, according to this report.
But building a starter home in Sydney is not impossible through Project Homes in Sydney.
What is the Budget One Need for a Starter Home?
Most Millennial Sydneysiders are looking for starter homes in the suburbs, partly because of the high cost of real property in Sydney. They have seen the benefits of owning their own properties rather than renting an apartment for the same cost of the mortgage.
There are still many places in Sydney’s suburbs, such as in Heathcote or Riverwood, for instance, where you can keep the price low.
In Sydney’s suburbs, you can budget about A$1,200 per square metre for a basic home but it can go as high as $3,000 per square metre if you want high-end finishes. So, you can have a three-bedroom house for around A$160,000 to A$180,000 for a starter home without all the bells and whistles.
There are a lot of factors that will influence the price. But one of the primary causes is the land valuation. If the market value of the location of your starter home is considered prime property, it will increase your total budget. Another factor is the size of your dwelling as building cost is calculated per square metre and the quality of the finishes. Naturally, if you choose premium tiles or fixtures and fittings, it will affect the total price.
The builder will provide you with the estimate of the total construction cost. What you should know, however, that the quoted price of builders is only the minimum estimated cost. There are additional costs that will be incurred if the location is classified as a flood-prone or mudslide-prone area. For the latter, retaining walls to protect your dwelling is needed.
Builders typically call these the variation costs, which translates to between 20% and 25% of the contract price.
One advantage of project homes in Sydney is the fixed price site cost, which means that the developer will shoulder any cost outside of the quoted price from site to completion. It means you do not have to be worried about being blindsided by any new additions. The site cost, however, is separate from the build cost. They also have starter home designs where you can choose to customise or build your own dream house, but calibrated to fit your budget.