The hidden costs of building your own home

Co-author: Olivia Fairhurst

Not only is the prospect of custom-designing your own family home a huge draw to thousands of New Zealanders, but it could also be cheaper than buying. That is, as long as you avoid some of the unexpected costs of building – some of which may surprise you. 

There are a great deal of potential hidden costs, just waiting to jump out at you and destroy your building budget. Here are five common ones:

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1. Soil test and contour survey

Before any builder or building company will give you a fixed quote for a build, they will probably need to do soil and contour tests. It’s important to get a quote for these too and include this price in your finance plans. The cost will vary between companies and how many features you choose to test. If you have rocky soil or any issues with your soil that makes it difficult to build, then you will also incur extra costs. And, if you’re attempting to build on a slope, expect to pay even more. Retaining is expensive! 


2. Site costs

Site costs cover the preparation needed on purchased land to ensure it is ready and safe to build on. This could well be the biggest cost you will incur, and unfortunately it has the largest variability as it will be based on your soil and contour tests. This step in the cost of building a house may include

  • Clearing the land of large rocks and vegetation
  • Grading the land (may include drainage control and erosion prevention)
  • Staking the area of construction
  • Building access road
  • Connecting the construction site to the electrical grid and other utilities
  • Digging out the foundation or basement
  • Demolishing existing structures3. Flooring

That’s right – don’t forget you want to walk around on something at least remotely pleasant and not all building quotes will include flooring in your house. Unless you’re happy living on a concrete slab, consider things like carpet, floorboards and tiles because you’re likely to be spending about $2000 on them.

3. Driveways

A cross-lease means you need to get permission from neighbour's for external rennovations

Many building quotes will only include the dwelling you’re going to live in so, assuming you want a driveway, be mindful that you may have to pay extra for it. Depending on the type of driveway, this could be fairly cheap or it could be extremely expensive. To save money you could look at not getting a driveway done immediately and look for cheap ways to do the driveway yourself, until you have enough money to get a concrete driveway built.

4. Modifications

“If you’ve decided on a design and signed off on a building contract, be aware that any variations to the plan can cost you big time.”

A change of heart in the middle of a construction project can run up a variety of additional expenses including:

  • legal costs (to change the contract)
  • penalty clauses
  • extra material costs
  • extra labour costs
  • engineering, drafting or approval costs.

Also, while the construction costs of building a typical house from scratch can be relatively easy to estimate with a rough rate per square metre, the cost of modifications can be extremely difficult to forecast. As Archicentre points out, modifications can involve extra repairs (e.g. re-wiring or re-stumping) and/or additional work such as demolition. These sorts of alterations do not add floor area to a building, so general rates per square metre for modifications aren’t usually reliable.

So, make sure you’re totally happy with a design plan before you sign the contract!

See our home loan comparison tool to see the best of the current market offerings for home loans with links direct to the providers’ website.

5. Other costs

There are numerous other potential costs just waiting around the corner of your new home with even the cost of new wheelie bins. You can refer to Land Information New Zealand for more information on potential land fees.

Is the extra effort worth it?

Some of that might sound a bit scary but, remember, building your own house is going to be one of the most exciting things you ever do. It will almost certainly increase your blood pressure for a few months, but when all is said and done you will hopefully have a beautiful home to truly call your own.

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