What a townhouse development costs in Australia

A two-storey townhouse costs roughly $2,900 to $4,500 per square metre to build in Australia in 2026 excluding GST, so $520,000 to $810,000 per 180 m2 dwelling before land. Add land, consultants, council charges, finance and selling costs and total development cost lands near $1.0 million per townhouse on a six-unit Brisbane site.

Townhouse quotes spread wider than house quotes because the per square metre rate is only half the story. Party walls, fire separation, shared driveways and tighter sites push the build rate above a project home, and then a second layer of cost sits on top: infrastructure charges, contributions, a dozen consultants, a construction facility that capitalises its own interest, and GST on the sale. This guide sets out the published 2026 rates from Rider Levett Bucknall, BMT, Turner and Townsend, Cordell and the ABS, the soft costs by state, and a full worked feasibility for six townhouses so you can see where a 20% margin actually comes from.

What a townhouse costs to build per square metre

The most quoted public benchmark is the BMT 2026 construction cost table. For a three bedroom, two level brick veneer townhouse on a Sydney base it publishes $3,256 per square metre at the low end, $3,793 medium and $4,318 high, excluding GST. Applying BMT's regional indices gives the following bands by capital city.

Rider Levett Bucknall's Riders Digest 2026 frames the same thing per unit rather than per metre: $425,000 to $775,000 per townhouse in Sydney at fourth quarter 2025 rates, excluding car parking and site works, with its city ranges for 90 to 120 m2 units running from about $2,250 per square metre at the bottom of Adelaide to $5,300 at the top of Canberra and Perth. Melbourne architects SQM quote $2,800 to $3,300 per square metre all-in including builder margin and GST for a standard two-storey townhouse, which strips back to a trade rate of $2,100 to $2,300, and about $580,000 for a 200 m2 dwelling. Feasly's 2026 developer guide puts a medium specification two-storey townhouse at $2,700 to $3,500 per square metre and premium at $3,500 to $4,500, or $400,000 to $700,000 per 140 to 160 m2 three bedroom dwelling.

Two figures explain why quotes land so far apart. The ABS building activity data for 2024-25 averages just $2,493 per square metre for new townhouses, but that is the value declared on the approval, which builders routinely understate. Turner and Townsend's 2025 survey, which averages every building type, puts Brisbane at $5,009 per square metre as the most expensive market in the country, ahead of Sydney at $4,866, Perth $4,497, Melbourne $4,242 and Adelaide $4,133. Townhouses sit well below that all-typology average, but Brisbane's position at the top is the reason Queensland feasibilities that were written on 2023 rates no longer work.

Escalation is back on. The Cordell Construction Cost Index rose 1.0% in the December 2025 quarter, the strongest quarter of the year, taking annual growth to 2.5%. RLB's tender price forecasts for calendar 2026 are 4.0% for Sydney and Melbourne, 5.0% Brisbane, 5.1% Adelaide, 5.3% Perth, 5.5% Gold Coast and 6.0% Townsville, with Queensland running around 7% a year through 2027 to 2029 into the Olympic build. A quote priced in January is materially cheaper than the same build tendered in December.

The soft costs that sit on top of the build rate

On a three to six dwelling project, professional fees run 5 to 9% of total development cost. Feasly's 2026 fee ranges: architect or building designer $15,000 to $60,000, town planner $5,000 to $15,000, civil engineer $5,000 to $12,000, structural engineer $4,000 to $10,000, surveyor $5,000 to $15,000, geotechnical $3,000 to $8,000, energy assessor $1,500 to $4,000, traffic engineer $3,000 to $8,000, landscape design $2,000 to $8,000, arborist $1,000 to $3,000, quantity surveyor $3,000 to $8,000 and marketing renders $5,000 to $15,000. SQM Architects gives $40,000 to $80,000 combined for architect, engineer and surveyor on a Melbourne townhouse job, plus $2,500 to $8,000 for the geotechnical investigation.

Statutory charges vary by state more than any other line. In Queensland, infrastructure charges are levied per dwelling by council and are the single biggest soft cost on a townhouse site.

The existing dwelling on the site earns a credit, so a six townhouse project on a single house lot usually pays on five. In New South Wales the council DA fee is set by the EP&A Regulation 2021 on estimated development cost: for works over $1 million it is $3,245 plus $1.64 for every $1,000 above that, so roughly $6,900 on a $3.24 million build, and anything over $3 million needs a registered quantity surveyor's cost report lodged with the DA. Section 7.12 levies are capped at 1% of construction cost, with section 7.11 contributions running 1 to 3% in councils that use them. In Victoria the planning permit fee is $3,980.70 for a $1 million to $5 million project and $10,146.10 from $5 million to $15 million, the public open space contribution is 3 to 10% of land value on subdivision, and development contribution plan levies in growth areas run $60,000 to $90,000 per dwelling. Utility headworks and connections add $5,000 to $25,000 per dwelling everywhere.

Then contingency. Feasly's guidance is 10 to 20% of construction cost at early feasibility, 5 to 10% once the design is developed and a contract is signed, and 3 to 5% during the build on a fixed price contract. Lenders expect the contingency line to sit untouched as headroom, and the quantity surveyor monitoring drawdowns flags it early if the builder is eating it in the first three claims.

Worked example: six 180 m2 townhouses in Brisbane

The figures below are indicative and assembled from the sources above: a 1,500 m2 middle-ring Brisbane site with one existing house, six three bedroom two-storey townhouses of 180 m2 each (1,080 m2 total), built at $3,000 per square metre ex GST with a 14 month construction facility from a non-bank lender. All costs are ex GST on the basis the developer is registered and claims input credits.

Revenue side: six new 180 m2 townhouses at $1,250,000 each gives a gross realisation value of $7,500,000 including GST. Brisbane townhouses currently trade in a broad $850,000 to $1,050,000 band with the median house at $1,232,690 on Cotality's May 2026 index, so a new four bedroom product at $1.25 million is achievable in the right suburb and optimistic in the wrong one. Under the GST margin scheme the tax is calculated on the sale price less the land purchase price, so ($7,500,000 less $1,500,000) divided by 11 is $545,000 payable, leaving net realisation of $6,955,000.

That leaves a development profit of about $776,000, which is 12.6% on cost and 11.2% on net revenue. Every senior lender will read that number before anything else. The industry benchmark, and the level most development lenders want to see before approving senior debt, is 20% on cost, with 15% the floor below which a project is generally considered not bankable and 25 to 30% expected if you want to build with no presales. Feasly's 2026 commentary is that most small townhouse projects are landing at 10 to 18% under current cost conditions, which matches this example.

The sensitivities show what has to move. Buying the land at $1,200,000 instead of $1,500,000 saves about $317,000 including duty and pushes the margin to roughly 19.5%. Tendering the build at $2,700 per square metre instead of $3,000 saves $324,000 plus contingency and interest, and gets to about 20%. Selling at $1,300,000 per unit adds $273,000 after GST and selling costs and lands near 17%. Land price discipline is the largest single lever, because you set it on day one and it carries duty, holding cost and interest for the whole project.

Where the margin leaks: hidden costs and holding costs

DA Leads published a useful post-mortem in March 2026 on a four townhouse Melbourne project with a $3.2 million gross realisation. The feasibility showed 15%. The hidden costs came to $333,000, more than 10% of revenue, and the realised margin was about 5%. The lines that were missed: council infrastructure contributions $60,000, the 5% public open space levy $50,000, tree removal and bonds $15,000, specialist reports $18,000, acoustic upgrades to meet the party wall standard $32,000, a phase 1 contamination assessment $5,000, finance establishment and monitoring $30,000, an interest rate buffer of $10,000, selling costs beyond the 2% commission $30,000, owners corporation setup $8,000, and the extra contingency that should have been there from the start, $75,000.

Holding cost is the other silent line. Feasly's full cycle for a small to medium townhouse project is 18 to 30 months from site identification to last settlement: 4 to 12 months in approvals, 9 to 14 months building, 3 to 9 months selling and settling. Land purchased with a land loan at 55% of value is paying interest for the whole of the approvals period before a single slab is poured, and rates are paid to council throughout. Land tax applies in most states once the site is held at 31 December or 30 June depending on the state, and it bites hardest in Victoria and New South Wales where the thresholds are low relative to site values.

Finance is the third. On a $2 million construction facility DA Leads puts total interest at $180,000 to $250,000 over a typical project, before the establishment fee of 1 to 2% of the facility limit, line fees of 0.25 to 0.5% a year on the undrawn balance, and 0.5 to 1% of the outstanding balance if you need an extension. Every month the build runs over is interest capitalised onto a balance that is already at its peak, which is why lenders price the builder's track record as carefully as the developer's.

How a townhouse development is funded

The stack on a six townhouse project is set by loan to cost. Senior bank construction debt runs 60 to 70% of total development cost, or 60 to 65% of gross realisation value, priced around 7 to 9% p.a., and usually wants qualifying presales covering a large share of the debt. Non-bank senior lenders fund 70 to 80% of cost at 8.5 to 13% p.a. with 30 to 50% presales or none on a strong sponsor, stretch senior reaches 80 to 85% of cost, and private senior lenders sit at 10.75 to 14% p.a. and will proceed with no presales, which is why roughly half of small construction facilities now settle without presale cover. Establishment fees run 1 to 3%, terms 12 to 24 months, and interest is capitalised into the facility during the build and repaid from settlements, with a quantity surveyor certifying each drawdown at $500 to $1,500 an inspection.

On the worked example a 70% non-bank facility is about $4.3 million against $6.18 million of cost, so the sponsor needs roughly $1.9 million, most of it land contributed at an accepted valuation. Where cash to complete is short, mezzanine debt or preferred equity fills 10 to 20% of cost at 14 to 22% p.a. plus 2 to 4% establishment and often a 2 to 5% profit share, on projects above $2 to $3 million showing 18 to 22% margin. Private and mezzanine lending is typically business purpose and not consumer regulated, and every facility is subject to lender assessment. Equity release off a bank valuation of land you already hold funds the approvals stage under property finance or commercial property finance, and the build sits under construction finance; a working capital shortfall is covered in property-backed business loans. To get a number from Ventas, send the site address, DA status, the builder's quote or QS estimate, proposed sale prices with comparables, your cash and land equity, and prior completions. See development finance for how Ventas structures the whole stack.

This is general information only and not financial, credit, or tax advice. Figures are indicative market data from the sources listed, not Ventas offers, and move with the market. Consider your own circumstances and speak to a professional. All finance is subject to lender assessment and approval.

This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.