Affordable suburbs for building a home in Perth. A recent analysis of ABS data reveals that the cost of constructing a new home in Perth has surged by over 40% since the onset of the COVID pandemic.
OpenLot, a land sales platform, reviewed five years’ worth of building data from Western Australia, New South Wales, Queensland, Victoria, and South Australia, focusing solely on houses and omitting apartments and land prices from the analysis.
Point Nepean in Victoria holds the record for the highest average cost to build a new house in Australia, reaching $1.2 million—almost five times the $287,151 average in Camillo-Champion Lakes, considered the top affordable suburb for building a home in Perth.
Following closely as the least expensive places to build in Perth are Ellenbrook ($312,581), Baldivis ($326,189), Brabham-Henley Brook ($326,880), and Wellard-Bertram ($333,033).
OpenLot founder Qi Chen explained that homeowners are not only facing rising costs but are also opting to invest more.
“While some of the increase is due to rising material and labor costs, a significant portion comes from homeowners choosing to spend more due to the property market boom in recent years,” he said.
Affordable Suburbs for Building a Home in Perth
Top Budget-Friendly Suburbs in Perth
The cost of building a new home in Perth
When property values rise in a suburb, people are more inclined to invest extra in building a new home there.
Queensland, which saw the largest jump in construction costs, New South Wales experienced the second-highest increase at 46%. Western Australia and South Australia saw comparable growth, with construction costs rising by 42% and 43%, respectively.
In contrast to 2022 and 2023, construction cost growth has slowed this year, with increases settling at 7.3%, though this remains more than three times the growth rate seen in 2020.
There was a notable gap in house building costs between the most and least expensive areas in each state.
Comparing Construction Costs Across Perth’s Suburbs
In Western Australia, several of the priciest locations for new builds were in regional areas, with Busselton at the top at $571,295, followed by Augusta ($476,179) and Mindarie-Quinns Rock-Jindalee ($428,806).
Building in WA carries a significant “regional premium,” with the average construction cost in Greater Perth being more than $30,000 lower than in regional areas.
Construction costs in regional Western Australia surged by an alarming 13.6%, while in Greater Perth, they only increased by 6%.
Key Factors Driving High Construction Costs in Perth Suburbs
It’s not just the cost of building new homes that’s rising—land prices in Perth have reached their highest levels since the 2007 economic boom.
According to the Urban Development Institute of Australia (WA), the average price for a new block of land in the metropolitan area now stands at $305,177, with prices continuing to climb.
This is the highest average price recorded since 2007, when land peaked at $317,000 during the boom.
Tanya Steinbeck, the institute’s chief executive, attributed the price increases to a shortage of new land for housing across Perth and regional areas.
While the established housing market has seen significant price growth since 2020, the new house and land market has remained relatively stable.
That stability is shifting, with a 9.5% rise in average land prices this quarter, amounting to a 25% increase over the past year.
Despite the drop in affordability, Western Australia remains the most affordable state for homeownership.
Homebuyers in WA haven’t been discouraged by affordability challenges, as loan activity increased during the June quarter,” Hart said.
The total number of loans to owner-occupiers in WA rose by 13% over the three months to June and 7.1% over the year, reaching 10,836 loans.
First home buyers were especially active, making up 38.1% of the owner-occupier market.
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