What Will It Cost?
When you are setting your budget for a new house, it’s not only the cost of the house and land, but all the other things that you might not have thought about.
If you haven’t considered these you might find that as well as a big mortgage your credit cards are all maxed out.
Here are some of the things you will need to consider based on Melbourne Outer Metro prices (say 35-40 km from CBD) in late 2010.
The costs are based on a small house with the builders basic fit out, say 15 square (140m2):
LAND
Cost of land $150,000 PLUS
Stamp duty say $5,000 PLUS
Legal fees say 2% $3,000
BUILDING
Basic cost of building say $150,000
Building cost are in the range $6,000 to $8,500 a square. Smaller houses have higher costs per square with cost per square reducing as the house gets bigger.
Site Cost say 5% $7500
Excavation to level the site (See this link: Steeper Sites) and/or additional foundations (See this link: Poor Ground ) and costs can quadruple.
Extras say 5% $6,500 plus
Can includes extra electrical fittings, washing line, garden paths. If you want premium kitchen and bathroom units it could be $50,000 or more. (see this link: Love the Display Home)
Legal fees say 2% $3,000
Fence say $2,000
Light fittings, picture hooks, curtains, blinds and other bits and pieces say $5,000
Garden say $10,000 plus
Additional Furniture say $5,000 plus
Removal say $1,000
TOTAL
Land and House $348,000 plus
Remember even if you get a house and land package for $300,000 you will need to allow for at least another $40,000 before you have finished.
A big cost is the land. This cost will drop as you go further from the city.
When I first bought a house the rule was you could only borrow two and a half times your annual salary! If you were to go back to that rule the only way to go in the future would be to fit houses on smaller blocks.
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