If you’re starting to seriously Google “how much does it cost to build a house in Melbourne?” you’ve probably already discovered one thing: the numbers are all over the place. That’s because custom home costs depend heavily on design, level of finish, and your block.
Ready to talk about real numbers for your block?
Average cost to build a custom home in Melbourne
Recent construction industry data suggests that building a new home in Melbourne typically falls somewhere between around $2,000 and $4,300+ per square metre, depending on design, quality and location.
For custom-designed or luxury homes, especially in metro areas like Melbourne, many builders report ranges more like $2,700–$4,000+ per m², with premium, architecturally designed homes sometimes going higher.
To put that into context:
- A 200 m² custom home might land roughly between $540,000 and $900,000+ for the build portion (no land or stamp duty).
- A larger 250 m² family home might range from around $675,000 to $1M+, depending on the level of specification and complexity.
These are ballparks only, but they give you a realistic starting point when you talk to Melbourne custom home builders.
What drives the cost of a custom build?
When you start getting quotes, most custom home builders will talk in cost per square metre. The final number depends on a mix of factors:
1. Design complexity
- Simple, rectangular floorplans with a straightforward roof are cheaper per m².
- Double-storey homes, large voids, big expanses of glass, feature staircases and cantilevered elements all push costs up.
2. Level of finish
- Standard tiles, laminate benchtops and basic joinery sit at the lower end.
- Stone benchtops, custom joinery, higher-end tapware, engineered timber floors and designer lighting will increase your m² rate quickly.
3. Site conditions
- Flat, accessible sites with good soil are the cheapest to build on.
- Sloping blocks, tight access inner-city sites, or highly reactive clay soils can add tens of thousands in excavation, retaining, and foundations.
4. Builder type: custom vs volume
- Project/volume builders offer pre-designed plans with limited changes, so they can keep base build rates lower.
- Custom home builders deliver a tailored design and more hands-on service, which usually means a higher cost per m² – but also a home that fits your block and lifestyle much better.
The extra costs people forget about
When you search “cost to build a house in Melbourne”, you’ll see plenty of per m² ranges, but that’s only part of the story. You also need to allow for:
Site costs
- Demolition of an existing dwelling (including asbestos, if present)
- Temporary fencing, tree removal, service disconnections
- Excavation, retaining walls, upgraded footings or slabs due to soil type or slope
Guides for Melbourne often show knockdown-rebuild projects landing in the mid- to high-hundreds of thousands for the build, depending on size and spec.
Pre-construction and approvals
- Contour survey and soil test
- Architectural or building designer fees
- Town planning (if required), especially in heritage or special overlay areas
- Engineering, energy rating, and building permits
Things not always included in “base price”
- Landscaping, decking and driveways
- Fencing, window furnishings, security systems
- Some light fittings and feature electrical work
Custom vs volume builder
On paper, a volume builder’s base price will nearly always look cheaper than a bespoke custom build. But that doesn’t always mean the total project will be cheaper.
Factor | Volume Builder | Custom Home Builder |
Base price | Base price usually looks cheaper on paper with fixed plans and standard inclusions. | Base price is often higher upfront because the design and specification are tailored to you. |
Overall project cost | Can end up higher once you add upgrades, site costs and variations, especially on tricky blocks. | Can deliver better overall value because the home is designed around your site, budget and priorities from day one. |
Best for block type | Works best on standard, flat blocks with minimal constraints. | Often better value for sloping, narrow or awkwardly shaped blocks that need a smarter, site-responsive design. |
Best for suburb / streetscape | Suits typical estates and new subdivisions where many homes follow similar designs. | Ideal for premium suburbs where you want a home that fits the existing streetscape and adds long-term value. |
Design flexibility | Limited flexibility – you’re mostly choosing from a catalogue and minor tweaks. | High flexibility – you can shape the floor plan, facade, finishes and details around how you live. |
Architectural detail & performance | Focus is often on keeping costs low and plans repeatable; less emphasis on unique architectural detail. | Strong option if you care about architectural detail, energy performance and long-term durability, not just room counts. |
Impact of rising construction costs | Changes in materials, labour and regulations can lead to unexpected extras if the original design wasn’t right for the site. | With Melbourne’s construction costs rising, getting the design right up front helps avoid rework, variations and budget blowouts. |
If you’re unsure which path to take | Good for simple, budget-focused builds on standard blocks. | If you’re weighing up options, Pascon’s article on what to expect when building a custom home in Melbourne’s suburbs is a useful reality check and starting point. |
How to get a realistic quote from custom home builders
To move from “per m² guesses” to real numbers, you’ll want to:
- Have a clear brief
- Approximate size and storeys
- Must-have rooms and features
- Target budget (including contingency)
- Gather basic site info
- Existing title and plan of subdivision
- Any known info on slope, trees, overlays or easements
- If possible, a recent survey
- Ask for transparent, itemised pricing
- Clear breakdown of site costs
- Inclusions schedule (so you know exactly what’s in and out)
- Clarification on provisional sums and prime cost items
This is where talking directly to a specialist custom builder pays off. They can walk through your block, listen to your brief and give you a tailored estimate instead of a generic cost-per-square-metre figure.
Ready to talk numbers for your own custom home?
If you’re serious about building, the next step isn’t another night lost to Google, it’s a conversation with someone who prices and delivers Melbourne custom homes every day.
FAQs About the Cost of Building a Custom Home
-
How much does it cost to build a house in Melbourne in 2025?
In 2025, the cost to build a house generally ranges from around $2,000–$4,000+ per m², so a 220–250 m² custom family home often sits roughly in the $600,000–$1M+ build range (excluding land).
-
What is the cost per square metre to build a custom home in Melbourne?
Most custom home builders in Melbourne price from roughly the mid-$2,000s per m² up to $3,000-$4,000+ per m² for higher-end or architectural homes, depending on finishes, structure and site works.
-
Is it more expensive to build a custom home than a project home?
Yes. Custom home builders usually cost more than project home builders, but they can deliver better value on tricky blocks, in premium suburbs and when you want a fully tailored design.
-
How much does a knockdown rebuild cost?
A knockdown rebuild typically runs into the mid-hundreds of thousands to $1M+ for the new home build, plus demolition and site costs, depending on your block, design and inclusions.
-
Is it cheaper to renovate or build a new home?
Cosmetic updates are cheaper to renovate, but if your home needs major structural work, a knockdown rebuild with a new custom home is often better long-term value and more energy-efficient.
-
How much does it cost to build a 3-bedroom or 4-bedroom house?
The cost to build a 3-or-4-bedroom house depends on total floor area and spec, but many custom 4-bedroom family homes now sit in the high hundreds of thousands for the build alone.
-
What extra costs should I allow for when building a custom home?
Beyond the base build cost, allow for site works, demolition, design and approvals, landscaping, driveways, fencing, window furnishings and a 10-20% contingency for variations and unexpected site issues.
-
How can I reduce the cost of building a custom home?
You can lower the cost to build a custom home by keeping the floorplan efficient, simplifying the roof and structure, choosing finishes carefully and getting detailed, itemised quotes from multiple builders.
Start your project with Pascon
Bring your site details, must-haves, and a ballpark budget. We will map a clear path from concept to handover and give you realistic timings for your suburb.
