The cheapest places to build in Perth – and WA’s most expensive

The price to build a new house in Perth has soared by more than 40 per cent since the COVID pandemic, according to new analysis of ABS data.

Land sales site OpenLot analysed five years of construction data in WA, NSW, Queensland, Victoria and South Australia. It excluded apartments and the price of land.

Building a new home costs a lot more than it did before the pandemic. Credit: Ross Swanborough

Australia’s most expensive average new house build cost can be found in Point Nepean, Victoria, which at $1.2 million was nearly five times more than the $287,151 average build cost in Perth’s least expensive location, Camillo-Champion Lakes.

The next cheapest place to build in Perth was Ellenbrook ($312,581), followed by Baldivis ($326,189), Brabham-Henley Brook ($326,880) and Wellard-Bertram ($333,033).

OpenLot founder Qi Chen said homeowners weren’t just victims of higher prices – they were also choosing to spend more.

“Part of the increase comes from materials and labour cost inflation, and the rest from people being willing to spend more on construction due to the home price boom of the past few years,” he said.

“When house prices go up in a suburb, people are willing to spend more to build a new house there.”

Qi said after Queensland, NSW had the second-biggest increase in construction cost at 46 per cent, while WA and South Australia had relatively similar increases at 42 per cent and 43 per cent, respectively.

“Looking back at the data for the past five years, you see virtually no increase in costs until 2022,” he said.

“Both in 2022 and 2023, the construction cost of new houses in every one of the five largest states increased by double digits.”

Compared to 2022 and 2023, construction cost growth looked relatively moderate this year, with increases dropping back down to the single digits at 7.3 per cent, even though the rate of increase remained more than three times the growth rate in 2020.

There was a large spread in house build costs between the most expensive and least expensive locations in each state.

Many of the most expensive places to build were in regional WA, with Busselton leading the pack at $571,295, followed by Augusta ($476,179) and Mindarie-Quinns Rock-Jindalee ($428,806).

Qi said building in WA attracted a significant “regional premium” with the average build cost of a new house in Greater Perth more than $30,000 cheaper than in the rest of the state.

“Build costs in regional Western Australia increased by a shocking 13.6 per cent, compared to just 6 per cent in Greater Perth,” he said.

It’s not just the cost of new houses on the rise – new land prices in Perth are the highest since the 2007 economic boom.

Data from the Urban Development Institute of Australia of WA showed the average price of a new block of land in the metropolitan area was now $305,177 and prices are on an upward trajectory.

That figure is the highest average price recorded since 2007, when the average price hit $317,000 at the peak of that boom.

Chief executive Tanya Steinbeck said the price hikes were attributable to a supply shortage of new land for housing across Perth and the regions.

“While the established market has experienced significant price escalation since 2020, the new house and land market has managed to retain a level of price stability,” she said.

“That is all starting to change with a 9.5 per cent lift in the average price of land this quarter, and that is a 25 per cent lift year.

REIWA chief executive Cath Hart said despite the decline in affordability, WA retained its position as the most affordable state for home owners.

“WA home buyers had not been deterred by the decline in affordability, with loan activity increasing over the June quarter,” she said.

“The total number of loans to owner occupiers in WA increased 13 per cent over the three months to June and 7.1 per cent over the year to 10,836.

“First home buyers were particularly active, making up 38.1 per cent of the owner-occupier market.”