New Home Cost Calculator
Estimate Your Build Costs
Factory-built sections, 30% cheaper than traditional
Pre-cut panels, up to 40% less waste
Less cost-effective than modular options
Standard construction with higher costs
Estimated Costs
Note: These estimates are based on Australian building costs in 2025.
Costs may vary based on location, design complexity, and site conditions.
Remember to include land costs, permits, and finishing details.
Building a new home doesn’t have to cost six figures. In fact, the cheapest way to build a house today isn’t what most people think. It’s not about skimping on quality-it’s about choosing the right system from the start. If you’re looking to build new and keep costs under control, you need to know which methods actually save money without turning your dream home into a nightmare.
Modular Homes Are the Real Winner
Modular homes are built in factories, section by section, then shipped to your lot and assembled. This isn’t the flimsy mobile home you remember from the 90s. Modern modular homes use the same materials, meet the same building codes, and often have better insulation than site-built houses. The big savings come from efficiency: no weather delays, no wasted materials, no overtime labor. A 2,000-square-foot modular home in Australia can be built for as low as $1,800 per square meter, including delivery and setup. That’s 30% cheaper than traditional stick-built homes in the same region.
Companies like Modular Home Australia a leading provider of factory-built homes that meet Australian building standards with customizable floor plans and energy-efficient finishes and Homes by Design a Melbourne-based modular builder offering turnkey solutions with solar-ready designs and low-maintenance exteriors have made this accessible even in regional areas. You don’t need to be near a factory-delivery is standard across Victoria and beyond.
Prefab Panel Homes: Faster, Smarter, Cheaper
Another top contender is prefab panel homes. These are built using pre-cut wall, floor, and roof panels made in a controlled environment. Think of them like a giant IKEA kit-but for houses. The panels arrive on site, and a small crew can raise the structure in days. Labor costs drop because you’re not paying for skilled carpenters to cut every stud on-site. Materials are ordered in bulk, reducing waste by up to 40%.
One family in Geelong built a 160-square-meter prefab home for $285,000 total, including land prep, permits, and fittings. That’s under $1,800/m². Compare that to the average site-built home in regional Victoria, which runs closer to $2,600/m². Prefab panels also allow for better thermal performance. Many systems include built-in insulation that meets or exceeds NatHERS 7-star ratings without extra cost.
Shipping Container Homes: Not as Cheap as You Think
Everyone talks about shipping container homes. They look cool online. But in practice, they’re rarely the cheapest option. A used 40-foot container might cost $3,000, but then you need to cut windows and doors, insulate properly, reinforce the structure, add a foundation, plumbing, electrical, and cladding. The labor and modifications often double or triple the initial cost.
A 2024 study by the University of Melbourne’s Centre for Sustainable Construction found that fully finished container homes averaged $2,400/m²-higher than modular and prefab options. They also take longer to build, have limited design flexibility, and often require structural engineers to sign off. For most people, the aesthetic appeal doesn’t justify the extra cost and hassle.
Slab-on-Grade Foundations: Skip the Basement, Save Big
One of the biggest hidden costs in home building is the foundation. Traditional homes often use raised timber floors or full basements. Both require deep excavation, footings, and more materials. Slab-on-grade foundations are just what they sound like: a single concrete slab poured directly onto the ground. No crawl space. No basement. No extra framing.
This method cuts foundation costs by 25-40%. It’s especially smart in places like Melbourne, where frost lines aren’t an issue and the soil is stable. Slab homes also reduce heating costs because the concrete acts as thermal mass-storing heat during the day and releasing it slowly at night. Combined with proper insulation, you can cut energy bills by up to 30%.
Many modular and prefab builders now use slab-on-grade as standard. If you’re going custom, insist on it. It’s one of the easiest ways to shave tens of thousands off your build.
Timber Frame vs. Steel Frame: What’s Really Cheaper?
Timber is still the most common framing material in Australia, and for good reason. It’s lighter, easier to work with, and cheaper than steel. A timber-framed house uses less energy to produce, and local suppliers have it in stock. Steel framing might last longer and resist termites, but it costs 15-20% more upfront. Plus, steel requires specialized tools and certified installers-adding labor costs.
For budget builds, timber frame wins. Just make sure you’re using treated timber that meets AS 1684 standards. Avoid cheap, untreated pine-it’ll rot faster and cost more in repairs down the line. A well-built timber frame with proper moisture barriers will last 80+ years.
What to Avoid: The Hidden Cost Traps
Even with the right method, you can still blow your budget. Here’s what trips people up:
- Custom finishes-stone benchtops, high-end tapware, designer lighting. These add up fast. Stick to standard options until you’ve paid off the house.
- Overbuilding the footprint-a 120m² home is cheaper to build, heat, and maintain than a 200m² one. Ask yourself: Do I really need that extra bedroom?
- Changing plans mid-build-every design change after the factory cuts materials means delays and extra charges. Lock in your design before signing the contract.
- Skipping permits-building without approval might save money now, but it’ll cost you when you sell. Insurance won’t cover unapproved builds.
Real Example: A $320,000 Home in Ballarat
A couple in Ballarat built a 140m² modular home with a slab foundation, timber frame, and standard finishes. They chose a simple gable roof, vinyl cladding, and laminate flooring. No pool. No garage. Just a functional, well-insulated home.
Total cost: $320,000 including land preparation, connection fees, and landscaping. That’s $2,285/m²-well below the regional average. They moved in after 14 weeks from delivery. No rain delays. No overtime. No stress.
They didn’t cut corners. They just cut waste.
Bottom Line: The Cheapest Method Is the Smartest Method
The cheapest building method isn’t about using the cheapest materials. It’s about using the most efficient system. Modular and prefab homes deliver the lowest cost per square meter, fastest build time, and least stress. Slab foundations, timber framing, and smart design choices stack the odds in your favor.
If you’re building new in 2025, don’t assume traditional methods are the default. Ask builders: "Do you use factory-built systems?" If they say no, ask why. Chances are, they’re just used to the old way-and you’re paying for their inertia.
Is a modular home cheaper than a site-built home?
Yes, typically by 20-35%. Modular homes are built in factories with bulk material purchases, minimal waste, and faster labor cycles. This cuts costs on materials, labor, and time. In Australia, a 2,000 sq ft modular home averages $1,800 per square meter, while site-built homes run closer to $2,500 per square meter.
Can you get a loan for a modular home?
Absolutely. Most Australian banks treat modular homes the same as site-built homes for lending purposes. As long as the home meets Australian Standards (AS 1684, NCC 2022) and is on a permanent foundation, you can get a standard home loan. Some lenders even offer construction-to-permanent loans that cover both the build and the land purchase.
Are prefab homes durable?
Yes. Modern prefab homes use the same structural materials as traditional builds-timber framing, steel connectors, double-glazed windows, and insulation rated to Australian standards. Many are tested for wind loads, fire resistance, and seismic safety. In fact, because they’re built in controlled environments, they often have fewer defects than site-built homes.
How long does it take to build a cheap home?
With modular or prefab systems, the build phase takes 6-12 weeks after delivery to site. Site prep and permits take another 4-8 weeks. So from signing the contract to moving in, you’re looking at 3-5 months total. Traditional builds often take 8-12 months.
Do cheap builds have good resale value?
Yes-if they’re well-built and properly permitted. Modular and prefab homes built to Australian standards hold their value just like site-built homes. Buyers care about condition, location, and energy efficiency-not how it was built. A 2023 report from CoreLogic showed no significant difference in resale prices between modular and traditional homes in Victoria over a five-year period.
If you’re planning a new build, start with modular or prefab. Skip the myths. Avoid the traps. Build smart, not hard. Your wallet-and your sanity-will thank you.
