What does it cost per square metre to build a townhouse in Melbourne?

Rider Levett Bucknall's 2026 Melbourne guide gives $2,800 to $4,850 per m² of gross floor area for townhouses of 90 to 120 m² per unit, using fourth quarter 2025 data. The rates exclude GST, land, legal and professional fees, loose furniture and fittings, and site works and drainage. Treat the range as a starting point for comparing quotes.

Do these figures include land, GST or site works?

No. RLB states that its building cost ranges exclude GST, land, legal and professional fees, loose furniture and fittings, and site works and drainage. Demolition, landscaping, connections, planning fees, subdivision fees and finance costs also sit outside the per-square-metre rate, so a realistic budget adds each of them separately.

How much is a planning permit for townhouses in Victoria?

For 2026-27, Planning Victoria lists $1,804.70 for developments costing over $100,000 up to $1 million (Class 12) and $3,980.70 for over $1 million up to $5 million (Class 13). Subdividing land into two lots is $1,537.00, and certifying the plan and issuing the statement of compliance is $203.80. These apply from 1 July 2026 and change each financial year.

Are building costs still rising?

RLB's Melbourne Tender Price Index moved from 217.8 in December 2024 to 226.5 in December 2025, about 4%, and RLB forecasts 4.0% for 2026. A price quoted months before work starts may not hold, so contracts that state timeframes and how price changes are handled are worth reading closely.

Does GST apply when new townhouses are sold?

It can. The ATO says a purchaser of new residential premises withholds an amount at settlement and pays it to the ATO: 1/11th of the contract price for fully taxable supplies, or 7% where the margin scheme applies. Whether either applies to a particular sale depends on the seller's circumstances, so a tax adviser should confirm it.

How much does it cost to build two or three townhouses in Melbourne?

Rider Levett Bucknall's 2026 Riders Digest for Melbourne gives a building cost range for townhouses of $2,800 to $4,850 per square metre of gross floor area, based on fourth quarter 2025 data. For three townhouses of 110 m² each, that works out at $924,000 to $1,600,500 for the buildings alone, and the figures exclude GST, land, professional fees and site works.

The published range covers the building only. Land, GST, legal and professional fees, site works and drainage, and the government charges below are all extra, so a project budget is always larger than the construction rate multiplied by floor area.

Checked October 2026. Rules, rates and prices change, so confirm anything that matters with the source linked below.

The headline range

Rider Levett Bucknall (RLB) publishes the Riders Digest, a construction cost guide. The Melbourne edition (54th edition, 2026) lists townhouses of 90 to 120 m² per unit at $2,800 to $4,850 per m², with a cost data date of the fourth quarter of 2025. To show what that means for two or three dwellings, this guide assumes 110 m² each, which sits inside RLB's band. The same guide also lists a unit cost of $315,000 to $700,000 per townhouse, excluding car parking and site works, so the per-unit spread in RLB's own table is wider than the 110 m² example.

Project	Floor area	At $2,800 per m²	At $4,850 per m²
One townhouse	110 m²	$308,000	$533,500
Two townhouses	220 m²	$616,000	$1,067,000
Three townhouses	330 m²	$924,000	$1,600,500

The arithmetic is floor area multiplied by the rate (330 x $2,800 = $924,000; 330 x $4,850 = $1,600,500). The top of the range is about 73% above the bottom, so the quote you receive matters far more than the average. The range itself does not show what puts a project at one end or the other, so ask each builder how garages, balconies and finishes are counted and priced.

Browse new townhouses

See the townhouse developments selling now, with bedrooms, prices and completion dates, city by city.

What the range leaves out

RLB lists these exclusions against its building cost ranges: GST, land, legal and professional fees, loose furniture and fittings, and site works and drainage, and it says car parking costs are also excluded from the building rates. Other parts of the same guide give rates for some of the missing items:

Demolition of a house: $125 to $145 per m² for a single-storey timber-framed house with tiled roof, and $165 to $230 per m² for a single or double-storey brick house with tiled roof. For a 150 m² brick house that is 150 x $165 = $24,750 to 150 x $230 = $34,500.
Dense landscaping around buildings: $215 to $410 per m². For 100 m² that is $21,500 to $41,000.

These are Melbourne guide rates from the same edition, not quotes. Site conditions, access and the number of services to connect can move them.

Government charges in Victoria

The Victorian planning fee unit value is $17.27 from 1 July 2026. Planning Victoria publishes these 2026-27 fees:

Item	Fee
Planning permit, development costing over $100,000 up to $1 million (Class 12)	$1,804.70
Planning permit, development costing over $1 million up to $5 million (Class 13)	$3,980.70
Subdividing land into two lots (Class 18)	$1,537.00
Subdividing land, other (Class 20)	$1,537.00 per 100 lots
Certification of a plan of subdivision and issue of a statement of compliance	$203.80

The development fee class depends on the estimated cost of the development. The examples above straddle the $1 million line: three townhouses come to $924,000 at the low rate and $1,600,500 at the high rate.

Where a development contributions plan applies to the area, Planning Victoria lists a cap on the community infrastructure levy of $1,590 per dwelling for 2026-27 (3 x $1,590 = $4,770 for three dwellings). The development infrastructure levy has no cap and varies by council and project. Subdivision can also trigger a public open space contribution under section 18 of the Subdivision Act 1988, which the council can explain for a given site. Infrastructure contributions plans and the growth areas infrastructure contribution apply to growth-area councils such as Casey, Wyndham and Whittlesea, not to established suburbs.

The pages checked do not publish building surveyor fees or utility connection charges. Those come as quotes from the surveyor and the service authorities.

Insurance, GST and finance

Home Warranty: for domestic building contracts signed on or after 1 July 2026, Victoria's Home Warranty scheme applies to eligible work over $20,000, and the registered builder pays the premium, though the BPC says the cost may be reflected in the contract price. Earlier contracts stay under Domestic Building Insurance.
GST: RLB's rates exclude it. Whether GST on construction can be claimed back depends on how the project is run and how the townhouses are sold, which is a question for a tax adviser. The ATO explains GST on sales of new residential premises and the margin scheme.
Finance: interest during construction, lender application fees and valuation fees sit outside the build rate. See townhouse development finance and construction loans.

Why quotes move after signing

Victorian building contracts can include prime cost items and provisional sums. The Building and Plumbing Commission describes prime cost items as materials whose price is not yet set, and provisional sums as estimates for work whose cost cannot be fixed in advance. Both can change the final price, so it is worth knowing how many of each a quote contains. How to choose a townhouse builder covers the contract points in more detail.

Costs also move over time. RLB's Melbourne Tender Price Index rose from 217.8 in December 2024 to 226.5 in December 2025, an increase of 8.7 points or about 4% (8.7 / 217.8). RLB's forecast for 2026 is 4.0%.

If you are weighing building against buying, you can browse new townhouses in Melbourne for comparison. How much land the buildings need is covered in how much land you need to build three townhouses.

Common questions

What does it cost per square metre to build a townhouse in Melbourne?: Rider Levett Bucknall's 2026 Melbourne guide gives $2,800 to $4,850 per m² of gross floor area for townhouses of 90 to 120 m² per unit, using fourth quarter 2025 data. The rates exclude GST, land, legal and professional fees, loose furniture and fittings, and site works and drainage. Treat the range as a starting point for comparing quotes.
Do these figures include land, GST or site works?: No. RLB states that its building cost ranges exclude GST, land, legal and professional fees, loose furniture and fittings, and site works and drainage. Demolition, landscaping, connections, planning fees, subdivision fees and finance costs also sit outside the per-square-metre rate, so a realistic budget adds each of them separately.
How much is a planning permit for townhouses in Victoria?: For 2026-27, Planning Victoria lists $1,804.70 for developments costing over $100,000 up to $1 million (Class 12) and $3,980.70 for over $1 million up to $5 million (Class 13). Subdividing land into two lots is $1,537.00, and certifying the plan and issuing the statement of compliance is $203.80. These apply from 1 July 2026 and change each financial year.
Are building costs still rising?: RLB's Melbourne Tender Price Index moved from 217.8 in December 2024 to 226.5 in December 2025, about 4%, and RLB forecasts 4.0% for 2026. A price quoted months before work starts may not hold, so contracts that state timeframes and how price changes are handled are worth reading closely.
Does GST apply when new townhouses are sold?: It can. The ATO says a purchaser of new residential premises withholds an amount at settlement and pays it to the ATO: 1/11th of the contract price for fully taxable supplies, or 7% where the margin scheme applies. Whether either applies to a particular sale depends on the seller's circumstances, so a tax adviser should confirm it.

Keep reading

Sources

This is general information, not financial, tax or legal advice. Get advice that suits your situation before you buy.