How much does a builder cost? [2024]

Building a house or undertaking a significant renovation or extension to your home? The first question you need to answer is how much is it all going to cost.  It is notoriously difficult to estimate an exact figure as there are so many variables to consider, one of which is the cost of your builder.

The first step is to do your research and decide what you want to be done. Then you can begin to work on the scope of the project, get plans produced and decide on what level of finish you want. This will enable builders to give you an accurate quote and tender for your job.

Hiring a builder can be a complex, time-consuming process but the more you know about it the better. This article will help you figure out:
 

• What jobs a builder can do?

• What to look for when hiring a builder?

• What might a builder charge you?
   

© J Build Master Builders | Brighton Home Builders

Did you know that the main job of a builder is to act as a project manager, coordinate all trades, and make sure everything is done to the correct standard?

What jobs can a builder do?

Builders can perform a variety of jobs, including:

General building work: this could involve a variety of projects, from construction, renovation, extension or demolition work.

Renovations: builders are often required to undertake larger renovation projects, such as a complete makeover of a kitchen or bathroom, and often specialise in these type of projects.

Home extensions: larger structural projects such an extension to your home or the addition of a room all require the use of a licensed builder.

New homes: this can involve everything from supply logistics to site selection and overseeing the whole construction project.

Project managers: many builders don’t actually do any actual building, but oversee and manage all the trades ensuring the job gets done right.

#hiptip: Your builder needs to be licensed and insured to carry out work on your project

What to look for when hiring a builder

Make sure your builder is licensed and insured. All states require builders to be licensed and insured to carry out work in your home.  

Depending on where you live, builders will typically hold a particular class of licence. This specifies what scope of work they are allowed to carry out. The class may, for example, restrict the licence holder to only working on kitchen renovations. This will be detailed on the builder's physical licence, alongside their name, licence number and the expiry date. Hiring an unlicensed builder is against the law and could lead to a fine or worse.

Builders should also carry valid insurance, including professional indemnity, public liability insurance builders warranty insurance  

You may also come across builders who advertise themselves as Master Builders. 

If you already have an idea of what you want with your new build, you can also use a building cost calculator to get a precise estimation of how much you should budget for your construction job.

© Concept Building

What is a Master Builder?

Master Builders are members of a nationwide association whose primary role is to, “provide services to members in a broad range of areas including training, legal services, industrial relations, building codes and standards...” The idea is that Master Builders operate to a strict code of conduct and perform work to the highest quality.

Should you hire them? They might be better informed than other builders, but they have the same qualifications and licence as other builders. You should still make sure your Master Builder is fully licensed and registered and that they hold all the necessary insurance cover.

Read: How to find the best home builders

Hiring a builder

When it comes time to hiring a builder make sure they are right for your job. Some questions to ask them include:

• Are you appropriately qualified and registered or licensed?

• Do you hold valid insurance (professional indemnity and public liability insurance)?

• Do you have experience in residential projects?

• Can you provide a written quote?

• How long will my job take?

• Do you have references I can follow up?

© Hermes Building
 

Why you will need to sign a contract with your builder?

A building contract is a legal agreement between you and your builder. It is required by law and is intended to protect the interests of both parties. It should have clear guidelines on a range of potentially contentious issues, including:
 

• A detailed scope of works

• A timeframe for when work is to be completed

• The total contract price

• All the costs involved in the project

• A timeframe when payments are due

• What happens if there are delays
   

It is essential that you get legal advice before signing a  contract with your builder as it must comply with the relevant legislation.  

Standard, lump sum or cost plus - which contract is best?

You will need to decide what sort of financial contract to sign with your builder - standard, fixed/lump sum or cost-plus.

Standard contracts are essentially kit form documents which are produced by organisations such as the Master Builders Association (MBA) and Housing Industry Association (HIA). They are governed by the Domestic Building Contracts Act 1995 and are most suited to simpler, small scale projects.  

Fixed or lump sum are the most common type of building contract and make the most sense if you are on a tight budget as you know the final cost upfront. There may be a clause for variations, where the cost of some items are not yet known, but there is usually a cap on the amount allowed.

Cost-plus contracts are more open-ended with the builder putting his margin on top of the price of the materials, with no definitive limit on how much will be spent. Use this only if you have leeway in your budget and trust your builder.

Read: Your essential guide to building contracts

Thinking of becoming an owner-builder?

Project managing your building or renovation project as an owner-builder is an option. However, unless you have experience of the process or knowledge of all the regulations it is unlikely you will have a positive experience. It makes sense to engage an experienced builder, dedicated project manager or if you are using an architect, ask them to take on this role.

Tips for working with a builder

Take time to think through your relationship with your builder very seriously - there are integral to the success of your project, no matter the cost. Consider

• If your builder is suited to your project, particularly if their skills and experience are relevant. If you are undertaking an attic conversion make sure they have worked on this type of job before.

• Having all your plans ready before you start approaching builders. That way they can accurately quote your job.

• Get a project manager - either the builder, your architect or a dedicated project manager. It will save you time and money.

• Being very clear of your expectations, especially the timetable of works and deadlines.

• Being very thorough in your final inspection, preferably walk through with your builder

• Giving yourself a 10% - 15% buffer to cover unexpected expenditure.

#hiptip: Get at least three quotes before you commit to hiring anyone, so you can compare price and level of service

Estimating the cost of your building or renovation project

The first thing to be aware of is that your building or significant renovation project is likely to cost more than you expect? Why? Because building is an inherently costly activity with multiple variables that can alter your budget significantly.

Some contributing factors include site conditions, level of fit-out, red tape and design considerations.

It also depends on what you are renovating or building. Any project that involves the addition of or renovation of a bathroom and/or renovation of a kitchen will be more costly. This is because of the practicalities of installing all the services, such as plumbing and electrics, as well as tiling/waterproofing for these rooms. Adding on a bedroom or living room will be comparatively less expensive, as it does not involve the same amount of work or level of detail.

Breaking down your building costs

As a guide to the breakdown of your total costs for a major renovation or building project, expect to pay

• 50% for materials

• 35% for labour

• 15% for council fees and permits

For example, in New South Wales, building costs for a "medium standard" house are estimated to be:

• $1200 to $1600 per square metre for brick veneer

• $1300 to $1680 per square metre for full brick

• $1480 per square metre for a timber frame house

For ground floor home extensions, expect to pay:

• $1350 per square metre for timber

• $1500 per square metre for brick veneer

If you are adding another level to your home, expect to pay:

• $1900 to $3000 per square metre if you are adding another level

The size of your job may also be a factor in the final cost, with larger jobs often cheaper per square metre than smaller projects due to economies of scale.

Getting quotes from builders

The best way of finding out the cost of your project is to get quotes from local builders. This will give you a sense of what market rates currently are.  
 

* All the costs and prices quoted were sourced at the time this article was written. They are indicative, may vary locally, are subject to market forces and should only be used as a guide.

Sources: Existing

https://www.bmtqs.com.au/construction-cost-table

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