Building costs have risen strongly in recent years and it is important that your building is accurately valued at replacement cost for insurance purposes. If you have not reviewed the “sum insured” on your home recently, then you should do so.
To give you a general guide as to recent trends in building costs, you can see Rawlinsons Construction Cost Guide. There have been large increases in costs in WA in recent times. Part of this increase is due to higher energy costs, material shortages and skilled labour shortages. This means that average building costs per square metre in Perth are currently around $1,000 – $1,250 a square metre. Note that these figures are for single storey brick and tile project homes, of medium finish. Of course figures can vary greatly depending on the standard of finish, quality of materials and fittings etc. Contract built homes are more expensive, and some upward allowance should be made in these situations.
If you live outside Perth, you should allow an additional margin to reflect higher building costs in these areas. Add 5 per cent markup to Perth building costs if you live in Busselton, 7 to 10 per cent in Geraldton, 45 per cent in Broome, and 50 per cent in Derby.
For two storey construction, upper floor areas should be valued at around twice the construction cost of single storey building work. Garage areas are less expensive to build so some allowance should be made for this in your replacement cost estimate.
Finally, typical renovation costs are around $2,000 – $2,500 per square metre. Note that these costs are average only and vary widely depending on the specific job conditions.