How Can I Save Money On A New Construction Home?

A building or extending a home is one of the most expensive financial commitments you can make, so it pays to know where you can save money on the project. However, it’s also worth noting the areas in which choosing a cheaper option can be a bad idea. Here’s how the speed of the build, the quality of the materials you select, the choice to render, and other factors can impact your bottom line.

Designing and later building a home is an exciting process. For most, it’s even a dream come true. However, all of this excitement can quickly fade if the associated costs begin to spiral out of control. Instead of watching your savings evaporate, there are ways to control a home building project. In fact, by being well researched, proactive and decisive, it’s easy to have a build come in the right on budget.

Understanding and implementing simple tips and tricks go a long way towards reducing stress, affording you the freedom to enjoy the process of watching a vacant piece of land transform into your dream home.

FAQs On How To Save Money On A Newly Constructed Home

  • Select a good block of land to build on.
  • Build-in less populated areas.
  • Build only what you need and keep the layout simple.
  • Consider going for prefabricated options.
  • Opt for basic finishes and fittings.

The cheapest way to build a home is to design a simple box. Sticking to a square or rectangle makes the building and design simple. Generally speaking, building up is cheaper than building a sprawling one-story home, so you may want to consider planning for a multiple-story home if you need more space.

  • Build speed. The biggest cost-saving you can make when building a home is the build itself.
  • Render the exterior.
  • Quality of materials.
  • Don’t skimp on kitchens and bathrooms.
  • Consider Material Alternatives.
  • Develop a Budget-Minded Plan.
  • Streamline Communication.
  • Reduce Excess Construction Waste.
  • Eliminate Change Orders.
  • Renegotiate Sub-Contractor Pricing.
  • Buy Dynamically.
  • It Is Possible to Cut Costs for Home Builders.

Never have so many construction input costs risen so fast at the same time. But residential construction spending remains above pre-pandemic levels thanks to a very strong 2020, and both residential and nonresidential construction volume has declined since the first of 2021.

Yes, you can negotiate on new construction homes - you’re far better off negotiating for ‘things’ than for money off the purchase price. Even negotiating closing costs is easier than negotiating the purchase price because builders want the final price as high as possible for future appraisals in the neighbourhood.


  • New Construction Upgrades that Add Value
  • Wood floors. Generally, carpet comes standard everywhere except for the kitchen, bathrooms, entryway and hallways.
  • Roughed-in plumbing.
  • Electrical.
  • Master bathroom tile work.
  • Radiant floor heating.
  • Deeper basement.
  • Appliances.
  • Lighting.

On average, you can expect to spend 20-25% of the base cost of your new home on builder upgrades.

Build Speed

The biggest cost-saving you can make when building a home is building itself. Compared to simply choosing different materials, the speed of the build can deliver huge savings if you do your maths. Of course, a faster build will usually cost more; however, that needs to be weighed against the holding costs for the property if you opt for a longer build.

That means calculating the interest payments on the block of land, the longer period without a rental income if you’re planning on renting out the house once it’s finished, or your rental payments on the house you’re staying in a while your new home is built. So if you were to save ten days with a faster build and it cost $5000 more, if your overheads were going to be $1000 a day (for the slower build), that means it would have cost you $5000 to hold the property for that extra time, so it’s a no brainer, you go with the faster option.

Render The Exterior

pexels karolina grabowska 6328938More and more houses feature rendered exterior walls these days, and with good reason: it’s one of the cheapest ways to dress up the outside of a home. Renders and lightweight foams are light and go up quickly, meaning labour costs are kept down, while the materials themselves are also very cost-effective. The downside is that so many properties are now being rendered that they are no longer unique, so while the render will almost certainly save you money, it won’t necessarily add value.

Quality Of Materials

You can save money on building costs by selecting cheaper materials that perform the same job as their more expensive counterparts. Still, in many cases, the difference in quality will be evident. For example, polishing a concrete floor can be a very cheap option but may not suit the style of every home. Carpet and timber flooring have options at many price points, depending on what you’re prepared to compromise on. The more money you spend on the carpets, generally the higher quality it’ll be and the nicer it’ll look, and the same with timber flooring as well.

Don’t Skip On Kitchens And Bathrooms.

While it’s easy to find ultra-cheap options when selecting fixtures, fittings and materials for your kitchens and bathrooms, unless you plan to remain in the house forever, you should consider what your future buyers might want, as not every potential buyer will be prepared to renovate after purchasing.

In terms of the cost to renovate, kitchens and bathrooms are the most expensive in the house, so you’re better off spending a little more and displaying a product that people will love, rather than displaying a product that people will look at and think.

Tips To Make The Most Of Your Budget

Designing your custom home should always be a fun experience. A good designer will encourage you to turn your dreams into reality at every stage of the process. But, even in a competitive home-building market, there is always a balance between desire and affordability. So, before committing to a process that is likely to be the biggest financial commitment of your life, it’s important to have a rigorous financial health check. Nobody wants to stretch beyond a reasonable reach, even for a dream custom home.

You should arrange for a specialist mortgage broker with construction-loan experience to review your circumstances and advise you on securing the best financing for your project. Once you know what you can afford, these tips can help you make the most of your budget.

Build For The Block

Make the most of your block’s natural features, contours, and shape. This will save a fortune in foundation work and retaining walls. In addition, if you have mature plants, you can save, then the cost of landscaping will reduce.

Exploit to the limit your state’s development codes or planning regulations as they apply to the building block. Of course, building extra space costs, but a good designer or building broker can advise you on which build areas cost less and get you a great home that maximises what’s legal for the lowest possible price. 

Include as much living space on the north-facing side of your home. Winter sun can greatly reduce your heating bills, and summer sun on entertaining areas and outdoor space improve the home’s appeal. Conversely, keep the bedrooms on the south-facing elevation wherever possible. Comfort from a cool bedroom away from the hot summer sun will reduce airconditioning costs and improve the liveability of your home.

Save With Smart Design.

Keep the perimeter of the home as regular as possible. Many indents and direction changes add length to the perimeter and increase the build cost considerably. The same goes for the roof shape. Complex hip-and-valley construction costs far more than a simple shape. Stay single storey if you can because two-storey homes can be costlier. If your block dictates that you must go up, then use designers with a good record in a multi-level building who will customise your two-storey home to the best possible size, shape and price.

Use standard window and door sizes from a widely used range. This makes the building easy to construct, and big suppliers will have better after-sales service if you have a problem down the track needing spare parts. Specify built-in cupboards, robes and storage spaces. This reduces the need to buy free-standing units and saves a huge amount of space in your rooms.

Clever Options And Features

Build-in as much “whole-of-life” savings as you can afford by building with low maintenance in mind and installing appliances or equipment that won’t date too quickly or cost much to run.

Consider making the most of your budget in the key areas your friends and family will see in your home. For example, reduce the specification considerably in the secondary bedrooms and bathrooms, study, and less-used spaces. This will leave more money for the powder room, living area, entry statement and kitchen, so that you can wow your guests and still keep the budget tight.

Keep landscaping simple but effective. Remember that plants and shrubs soon grow, so specify small sizes to keep the cost down and let nature take its course as your garden matures over time. Take advantage of a building broker’s huge buying power and specify as much as possible for your home within the build package. This will mean that you benefit from the great deals they have with major suppliers that you won’t get if you shop alone after the build is done.

Make certain that your house is not the best in the street. Look at the prices of the homes around you, and design so that your homes falls among the median values. Overdeveloping a block can be a costly mistake.

How To Keep Building Costs Down?

Many may think that controlling the cost of a build is all about compromise. However, this couldn’t be further from the truth. Instead, keeping costs down when building a home is all about smart decision making. Smart decision making comes from being well informed and clear in your vision for your new home. This, in turn, allows you to employ simple tips and tricks that will help keep you on budget right from the word go.

Get Your Finances In Order.

pexels karolina grabowska 4386342Before rushing in and making land and house commitments, check your finances. A mortgage is a big commitment that shouldn’t be entered into lightly. The last thing you want is to get into debt for your home and struggle to make other repayments.

Additionally, make sure your existing home has been sold before building. This means you won’t have to furnish two mortgages simultaneously. Even if you have to rent in the meantime, this decision will save you thousands in the long run.

Finally, build a budget. Work out the amount you can comfortably spend while still building a great house. Once you’ve set an amount for the budget, allow for a contingency amount. This way, you have the money necessary should unforeseen building costs arise.

Choose A Block Of Land Wisely.

A block of land can make or break your build and the associated budget. To make the best decision possible, start researching the area you are interested in buying into. Look at the area in terms of growth and current infrastructure. Does it match your lifestyle? Once you’ve researched the area, it is time to assess the block of the land itself. First, survey the land for easements. Conduct soil testing to ensure you choose the most appropriate foundations for your home. Understand if the land is sloping or not. If so, the build will be more costly.

Given that Australia is a country of extremes, before purchasing land, it’s important also to understand and assess the risk of bushfires and flooding. These dangers can be avoided by consulting Geoscience Australia, which can help determine flood and bushfire zones. Finally, find out what restrictions and zoning regulations are in place when it comes to the piece of land. By being informed early, you can amend plans before the soil is broken, saving money in the long run.

Find The Right Builder.

Much like finding a piece of land, finding a builder can make or break your build. A good builder will work collaboratively and to a set time frame. They were helping you manage costs and inconvenience. With limited on-site presence, the wrong builder will be hard to talk to.

When hiring a builder, ask key questions and be provided with references. Ensure any builder you speak to is registered with the proper certification and insurance. Finally, make sure that your builder has enough time in their schedule to accommodate your build.

Leave Out Extra Features.

Leaving out extra features isn’t about compromising. Rather, it’s about making smart investment decisions in your home. Multi-level pitched roofs, cathedral ceilings and ornate cornices can add tens of thousands to the total and for what purpose? Aesthetics only.

Source Materials On Your Own

Builders can enjoy access to bulk materials at wholesale prices. However, for items that are not purchased in bulk, you may be able to get a better deal by shopping around and asking for quotes—source appliances like ovens and stoves on your own. By shopping around, you may be able to find the perfect appliance on sale. You may also want to source your water heaters, and radiators as stock models from builders are traditionally quite expensive.

Never Accept The First Quote.

When shopping around for builders, contractors and materials, never accept the first quote. Instead, contact different companies to get quotes and then leverage these quotes to get the best price possible.

Complete Finishing Touches Yourself.

Contrary to belief, not every task building a home requires a specialist builder or contractor. This is good news for home builders as this provides yet another way to save money.

For example, please pick up a paintbrush and paint the feature walls yourself instead of hiring someone to do it. Get your hands dirty in the garden and finish off the landscaping. Screw the handles onto the kitchen cabinetry. Doing simple tasks yourself could save hundreds.

Stick To The Plan

One last tip? As best you can stick to the plan. Changing your mind once work begins is an extremely costly endeavour. Plan amendments don’t just incur material and labour costs, and builders will also charge a premium of around 20%.

Sticking to the plan may seem like an uphill battle; however, it’s made easier by thoroughly researching, planning and defining your style, wants and needs before work begins. This way, you have a clear plan in place that perfectly accounts for lifestyle and other variables.


Above all, don’t commit to an architectural design without getting proper cost advice at the same time. Architects will design your concept and do amazing work for you, but they are not necessarily cost experts. It’s far better to engage a designer who can work with a cost adviser and develop the design within budget as they go.

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