Clients often ask me, ‘What is your square-metre ratio? How much do you charge per square metre?’ This question is similar to asking how much a car costs. The answer depends on what you’re looking for. Are you looking for a KIA or a Mercedes? Also, the top of the range KIA can be double the price of a basic Mercedes. The price per square metre is only valid when we compare very similar buildings. It’s mainly suitable for assessing volume builders on new developments, where site costs are the same and the design is very similar. I also use square-metre comparisons when quoting clients for a new custom home project so I can compare them with previous custom home projects to make sure I don’t miss something and ensure steady profitability for the company. However, it only works with similar custom house projects. A brand-new, good-quality custom house on sloping land with some tricky retaining walls starts at $3,500 per square metre in 2022. Volume builders on flat land can build a house with similar inclusions for less than half of this square-metre price.

Generally, the price per square metre goes down with the size, because there are quite a few fixed costs associated with each custom home project, but documentation for tricky small home extensions can be significantly higher than documentation for a large simple house … The widest fluctuation on prices is with house extensions. The most expensive are second-Storey additions. To justify the cost, we should only consider them when all other options are exhausted. Ground-floor additions are obviously less expensive.

Case study
I was approached by a client who had finalized plans for adding an ensuite to his bedroom. The design (done by his architect) assumed extending the roof of the existing building and a concrete slab below with all the associated underground drainage. The whole footprint of the new proposed bathroom was less than six square metres, but due to all the other work required, I didn’t see how I could complete the project for less than $70,000 before even calculating my profit. The total cost per square metre of this home extension project was around $15,000 per square metre, but it could have been significantly less if someone consulted with the custom house builder before the custom design process started.