Revealed: Melbourne suburbs where new homes cost over $1m

Metricon’s Highland build in Gisborne is worth more than $1m, and an example of the Melbourne homes families are building to avoid buying their next place — and paying stamp duty.

Designer kitchens, an ensuite for the kids, saunas, wellness centres and a desire to dodge six-figure stamp duty payments are driving thousands of Melburnians to build $1m dream homes.

Nine municipalities now have average new build costs topping $1m, according to Australian Bureau of Statistics housing approvals data that shows the city’s priciest pocket is the City of Stonnington where the typical new home is worth a whopping $2.886m.

Even once relatively affordable neighbourhoods such as Monash and Moonee Valley have hit seven-figure construction costs, with building industry bosses revealing many families are bulldozing their own homes to get a dream new build — without paying another hit of stamp duty by relocating.

RELATED: ABS data: New build costs surge, helps cement rate cut

National Housing Accord 60,000 new homes short in first year

Vic families slugged $373k in tax, red tape on new builds: HIA

Shockingly, the figures uncovered in analysis of the ABS data for the past financial year only cover the expected building cost.

Planning approvals, purchasing the property to build on and any additional costs such as land tax and stamp duty are added on top, meaning the end cost of a new home would be a multimillion-dollar sum in most instances.

However, builders have revealed many families in the most costly neighbourhoods to build a new home are bulldozing their own home and building new in a bid to get a house that suits their needs, without paying hundreds of thousands of dollars in stamp duty tax by moving.

A Marque Property Group that topped the $1m mark.

Inside the more than $1m build has plenty of style-centric features, but is also still guided by functionality and family-friendly use.

Marque Property Group’s David Borg caters to higher-end builds, typically north of $1.5m, in established Melbourne suburbs.

Mr Borg said while prices for materials such as concrete, timber frames and the copper needed for wiring was definitely up, top end homes were changing.

Additions such as mud rooms, basements for carparking, home saunas and wellness centres, as well as lifts, were becoming more and more common above $1.5m.

“And dog washes are getting more popular now, too, with a lot more ‘inside pets’ people are thinking about wanting that in their garage,” Mr Borg said.

Mr Borg said he was now also starting to see the $1m-plus builds appearing in places like Avondale Heights and Keilor.

Where Melbourne’s $1m-Plus Builds Are

Stonnington – $2.886m, up from $1.062m in 2015

Boroondara – $1.783m, up from $781,000 in 2015

Bayside – $1.753m, up from $787,000 in 2015

Yarra – $1.359m, up from $460,000 in 2015

Port Phillip – $1.315m, up from $621,000 in 2015

Mornington Peninsula – $1.102m, up from $400,000 in 2015

Glen Eira – $1.047m, up from $455,000 in 2015

Monash – $1.022m, up from $455,000 in 2015

Moonee Valley – $1.003m, up from $402,000 in 2015

Source: ABS Building Approvals, financial year 2025, 2015

There’s also a growing share of top-end home buyers looking to energy saving advancements as a way to future proof their home, he said.

When it comes to the $1m builds, Metricon chief executive Brad Duggan said the National Construction Code’s increase from six-star energy efficiency to seven-star energy efficiency minimum standards had added substantially to costs in the past year.

“But the main reason you are seeing prices rise is that Australians love real estate, and if they have money to spend they will spend it on real estate,” Mr Duggan said.

He noted a growing number of Victorians also looking at building new homes in place of their old one as a way to skip stamp duty bills and future-proof their lifestyle — ensuring they, and their children, can stay in communities they had built connections with long term.

Metricon’s Bayville design offers expansive living spaces for a more than $1m price point.

A Balwyn new home build by Metricon worth more than $1m shows what you can get for the sum.

“The majority of the spend will be on living rooms, larger bedrooms and multiple bathrooms,” he said.

“People are planning for their kids’ futures and to spend more time with them.”

Mr Duggan said many of the areas were having their build costs buoyed by families replacing their existing home, after buying the property at a more affordable price in the past.

“So you are seeing designer kitchens with butler’s pantries, a lot more benchspace or even two benches, and a lot of custom cabinetry,” Mr Duggan said.

Housing Industry Association Victorian executive director Keith Ryan agreed that rising build costs weren’t the only reason behind more $1m builds.

“Increases in home sizes and the average number of storeys for a home partly explain this outcome,” Mr Ryan said.

“But another important factor is the relative increase in the cost of high quality detached homes as opposed to the number of more affordable homes in these areas.”

Another of the Marque Property Group’s $1m+ builds in Melbourne.

Inside, the home features expansive entertainment space.

Across Melbourne, the cost of building has more than doubled in 22 municipalities in the past decade.

Victoria wide, the ABS data shows the cost of building a new house has surged almost $220,000 (75.3 per cent) from $291,300 in the 2015 financial year to $512,500 in the past 12 months.

Building material costs have risen about 56.4 per cent in the same period, according to the ABS’s Producer Price Index.

The remaining 20 per cent jump is potentially partly explained by a 10.7 per cent increase in the floorspace of homes in the same timeline, rising from 197sq m to 218sq m, according to Victorian Building Authority statistics.

And the share of double-storey builds has also risen, with the state’s average up from 1.34 storeys to 1.41 storeys in the same time line.

Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.

MORE: Self-tan mogul lists luxe Middle Park beachfront pad for $15.9m+

Maddingley agent’s ‘f***ing nice house’ sales pitch goes viral

Brendan and Alex Fevola’s glam $4m+ Melb home hits the market

The post Revealed: Melbourne suburbs where new homes cost over $1m appeared first on realestate.com.au.