What Are the Hidden Costs of Building Townhouses in Melbourne?

What Are the Hidden Costs of Building Townhouses in Melbourne?

While many townhouse developers plan for construction and land costs, few are fully prepared for the hidden expenses that can derail timelines and budgets.

At Gidaya Group, we’ve worked with hundreds of Melbourne clients and know precisely where costs hide — and how to eliminate surprises.

This article outlines the most common hidden costs townhouse builders face in 2025 and how to budget for success.

1. Planning & Design Changes

Initial plans rarely go untouched. Even small tweaks — extra windows, better cladding, or a new internal layout — can cascade into major variations.

Cost Range: $5,000–$15,000 depending on changes

How to Avoid: Use a builder like Gidaya Group who offers design-to-build workflows and finalises scope early.

2. Site Preparation Surprises

It’s what’s under the surface that catches developers off guard:

• Tree or stump removal

• Soil remediation

• Rock excavation

• Poor drainage or water table issues

Cost Range: $8,000–$30,000

How to Avoid: Conduct a full soil test (geotechnical report) before finalising your build contract.

3. Council Fees & Delays

Aside from the obvious town planning permits, there are layered costs like:

• Asset protection permits

• Tree removal consents

• Public liability insurance

• Building permit staging fees

Cost Range: $3,000–$6,000

How to Avoid: Gidaya Group handles council liaison and fast-tracks submission accuracy to reduce delays.

4. Utility Connection & Infrastructure Fees

Connecting your new townhouses to Melbourne’s essential services is not always straightforward. Costs vary by suburb and site conditions:

• Power upgrade and pits

• Sewer and water extensions

• NBN trenching

• Stormwater easement redirection

Cost Range: $10,000–$25,000+

How to Avoid: Get service plans early from authorities. Gidaya Group can coordinate infrastructure providers.

5. Subdivision & Titling Costs

When building multiple dwellings on one lot, subdivision is often needed to sell individually. Costs include:

• Land surveyor

• Statement of compliance

• Plan registration with Land Use Victoria

Cost Range: $15,000–$35,000 per project

How to Avoid: Include titling costs in your feasibility early. We offer fixed pricing for subdivision-ready sites.

6. Landscaping & External Works

Townhouse builders often overlook:

• Driveway concreting

• Fencing and gates

• Retaining walls

• Turf, plants, and garden beds

These are essential for occupancy and resale value.

Cost Range: $8,000–$20,000

How to Avoid: Ask your builder whether the quote is turnkey (includes landscaping). Gidaya Group’s turnkey contracts cover external works by default.

7. Demolition & Site Clearance

If you're replacing an existing dwelling, you must account for demolition — including asbestos testing and disposal.

Cost Range: $15,000–$30,000 depending on site complexity

How to Avoid: Gidaya Group conducts pre-purchase feasibility reports to factor in demo and remediation early.

8. Holding Costs

The longer the build, the more interest and holding fees you accrue. These include:

• Land loan interest

• Construction loan drawdowns

• Rates and insurance during the build

How to Avoid: Work with a builder who meets deadlines. Our Gidaya Group timeline tracker ensures projects stay on course.

Summary Table of Hidden Costs

Final Word

Building townhouses in Melbourne offers excellent returns — but only when your cost estimates are complete.

Work with a builder like Gidaya Group that brings visibility and cost control to the full project journey.

Considering a townhouse project? Contact Gidaya Group for a free site assessment that includes hidden cost identification.