Budgeting Project Costs: The Four Ss and the Myth of the Square-Metre Rate
The key to keeping a home building project on budget is making every decision at the beginning of the project. This means every decision, from the roofing material to the tile selections, must be made during the design phase. Design and budget must work in parallel.

The Myth of the Square-Metre Rate
By far the most common question I'm asked is "What is the cost to build per square metre?" I am yet to meet a builder who can give an exact answer for an architectural home build. It's the building equivalent of asking "How long is a piece of string?"
That's because the square-metre rate is affected by many factors: site slope, access, soil conditions, ceiling heights, shape of the house, and quality of finish.
The Four Ss
I've developed a formula for approximating the square-metre rate:
Home Construction Cost = (Shape + Style + Selections) × Size
- Shape: Two 200m² homes can have vastly different costs. A simple rectangle (4 corners) vs. a complex shape (20+ corners) can mean a $1,000/m² difference.
- Style & Complexity: A simple single-storey vs. a complex design with raked ceilings, floor-to-ceiling windows and curved walls.
- Selections: The materials and products you choose — from flooring to kitchen appliances to window performance.
- Size: Below ~110m², certain fixed costs mean smaller homes aren't proportionally cheaper. Above that, rates begin to even out.

Why Budgets Blow Out
The most common reason is build variations — changes to the plans after construction has commenced. Every change during construction costs significantly more than making the same decision during design. This is why our process front-loads every decision.
Project Cost Equation
Total Project = Design + Design Consultants + Site/External Costs + House Construction
- Design: Architect or building designer fees
- Consultants: Engineers, energy assessors, surveyors
- Site/External: Driveways, landscaping, services, tanks
- Construction: The building itself (using the Four Ss)
About the Author
Luke Davies
Luke is the founder of Davies Design & Construction and author of Dream Home. He writes about home design philosophy, lean construction, and building businesses that put people first.
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