How much does it cost to build a townhouse?

Bob Andersen's property developments

How much does it cost to build a townhouse?

The biggest cost you will incur in doing a townhouse development is usually the construction. In high, upmarket areas it can sometimes run second to the land.

So how hard can it be? Surely, it’s just a matter of multiplying the size of the proposed townhouse by a base square metre rate. You’d think so, but it’s not always that simple.

Ground conditions such as soil type and slope affect the cost. Soil type greatly affects the foundations and slope creates cutting, filling, retaining and drainage issues to be solved. All this comes at a cost. The standard of finishes – particularly the expensive rooms such as kitchen and bathrooms has a marked effect as do the selection of materials – brick, lightweight sheet, tile.

Complex roofs, cantilevers (overhangs), building perimeter length all have an effect on cost. So, if it’s that straightforward, how come you can get a 20% + variation between the cheapest and dearest quotation when running a tender. This is when you have detailed construction drawings – architectural and engineering.

The answer is – I’ve never solved the question, and some quotes I’ve received vary 30%. It’s not about size, overheads, or buying power. Small builders have small overheads and limited buying power. Large companies have higher overheads but better buying power.

So, where does that leave you? Don’t get one quote, obviously. Seeker builder referrals from trusted sources. Track down builders doing projects in your locality – they won the job after all.

I could tell you that we’re currently building two-level townhouses in Melbourne for $2.100 sq.m.+ GST or $1,900 sq.m. + GST in Brisbane and 2-bedroom apartments for $270,000 + GST but that’s now (November 2021). Don’t read this article in two years and adopt that price.

In summary – there are many variables to consider when pricing townhouse construction. There are no ‘off the shelf’ prices, prices will vary, so go and meet as many builders as you can.

 

Regards,

Bob Andersen

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