Building a standard 4-bedroom home in Officer and Pakenham now costs between $380,000 and $430,000 before land costs, a significant jump from under $280,000 in 2019. These elevated costs aren’t temporary – they’re the new normal for anyone considering a new build in the South East.
What drove the price increases?
Global supply chain issues from 2021 onwards sharply increased the price of essential materials like timber and steel. Simultaneously, demand surged during the COVID-era building boom, pushing up trade labour costs. The collapse of dozens of mid-tier builders, locked into fixed-price contracts, further cemented these higher costs.
What does this mean for existing homeowners?
High build costs act as a natural price floor for established homes. When it costs $400,000 plus to build a replacement, buyers begin to see existing homes as genuinely good value. This supports pricing for sellers.
The honest reality
These elevated cost levels have not come back down in 2026. While some hoped for a return to 2019 prices, that’s not happening. Anyone budgeting for a new build needs to accept the current, higher cost of construction.
Questions to consider
- Is your land ready to build on, or are there hidden costs like site preparation and permits?
- Have you factored in potential delays and escalation clauses in your builder’s contract?
- What is the builder’s financial stability and do they have current domestic building insurance?
Talk to KR Peters for a straight-talking appraisal with no obligation.
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Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.