Building your own house is a dream project for many. But it’s not one that should be taken lightly.
There are a huge range of financial, legal, and practical questions you should answer before you even begin! First among them is how much it even costs to build a house?
The construction cost data in Malaysia over the last decade reveals increasing price tags within the industry.
The Construction Cost Handbook Malaysia 2018 and 2019, from developers Arcadis, paints a clear picture of escalating costs over the last ten years.
In the focus area of analysis, Kuala Lumpur, the cost per square meter for both detached houses and luxury apartments increased from just under RM3,000/sq m to over RM3,500/sq m from 2008 to 2018.
The cost per square meter of a regular high-rise apartment increased from RM1,500 to RM2,000. So how do those costs vary and how should you budget?
Factor 1: Construction costs and budgeting
The golden rule of house building – investigate the costs in detail before you get started!
Remember, unless you’re lucky enough to own a piece of land, or in a situation where you’re tearing down an old home to build a dreamy new one, purchasing land will have to factor into these costs.
It’s going to be a whole lot more difficult (and expensive) to buy that land in downtown Kuala Lumpur than it is in rural Perak.
Construction costs also vary by state, factoring in elements like local contractors, materials, and even terrain.
For example – excavating a basement in Kuala Lumpur costs on average less than in Johor Bahru, while Johor Bahru has lower costs for structural steelworks than KL.
There are a huge number of elements to factor in when considering your budgeting, and speaking with the professionals is definitely the best place to start!
You'll be able to find the Malaysia construction cost per square feet, 2018, for key property types in the table below.
Malaysia Construction Cost Per Square feet 2018 for key property types
Detached house (mass housing)
Luxury apartments (high-rise)
Standard apartments (high-rise)
RM150.50 - RM207.20
RM201.60 - RM332.10
RM105.90 - RM178.80
RM135.10 - RM165.80
RM151.60 - RM213.20
RM99.30 - RM125.00
RM153.30 - RM199.70
RM226.20 - RM283.30
RM111.50 - RM148.60
Want some help with a simple building cost calculator? This cost calculator from insurers PIAM can offer a very rough cost estimate on ‘rebuilding’ costs.
That obviously doesn’t take into account other elements, such as land purchase.
Factor 2: Land
We’ve mentioned it above, so it’s worth going into detail! If you don’t have land already, you need to find a plot of land for sale.
Land will cost more in desirable locations. So if you’re looking for an inner city KL plot right next to an MRT station, you’re going to find it tough!
Of course you can always repurpose a plot of land you already own, if you’re not particularly attached to any property standing there already.
The price of plots on PropertyGuru at the time of writing range from rural affordable locations right through to major development sites in Kuala Lumpur and Penang for hundreds of millions of Ringgit.
The best place to start is with our guide on how to buy vacant land in Malaysia.
Factor 3: Hire professionals
If you want something done right, you need to hire the RIGHT professionals to help you along the way.
And since this ‘something’ is potentially the roof over your head, you probably want it to be safe, secure, and completed to the highest standards.
There are five key professionals you should consider when asking how to build a house:
Architects – The designer of your dreams. An architect will create a template for your new home, building on your description of what you want it to look like to create a design which meets your needs. You can find out more, and a list of registered practices, at the Board of Architects Malaysia.
Engineers – Structural and mechanical engineers are there to design the key nuts and bolts of your house. While the architect might design a beautiful shell, these people are here to fill in essential elements from load-bearing beams to practical plumbing.
Lawyers – There’s always some essential paperwork that needs a professional touch when it comes to building a house. Whether that’s land purchase agreements or permits for construction, a lawyer is an essential part of your professional needs.
Surveyors – Surveyors are there to make sure your house is built on the right foundations. That means everything from geographical surveys to assess the ground below to a building surveyor who monitors the quality of the work as it progresses.
Builders – Someone has to make sure your dream house turns into a reality! It’s a common mistake to assume you can do a large part of a house build yourself, but this is a full-time job. You need professional builders contracted to deliver your house on time. Your architect may be able to recommend a business they’ve worked with before, or speak to friends and family who might have an informed recommendation to offer.
An increasingly accessible option that might be worth exploring is the prefabricated house route, using IBS construction methods.
While not widespread in Malaysia (yet), there are companies emerging in the market that can create a custom-built prefabricated home that will incorporate almost all the professional roles and requirements listed above under one central business.
Factor 4: Blueprints
You can’t design a house on the back of a napkin. You'll need to work closely with the architect to create a blueprint that provides a detailed plan for construction of your home.
A qualified architect not only helps create a practical vision of your dream, but should also know all the relevant building and zoning regulations.
He/she must be the one to ensure that you don’t end up building something that breaches local rules.
Ultimately, this blueprint should not only set out a vision of what you want, but also be informed by your professional team to deliver all the practical considerations such as good drainage, lighting, and safety.
Factor 5: Timeline
One of the single greatest risks to your house construction budget is overrun timelines.
Every day that your project goes beyond the budgeted timeline is a day more you have to pay professionals to finish your home.
It also has knock-on impacts such as having to continue to pay for your current accommodation beyond the budgeted time. That’s a major problem for cost escalation.
Work closely with your architect, surveyors, and builders to create a sensible and achievable timeline for your home build.
Beware of being overconfident of how much you might get done yourself – novice home builders failing to appreciate how much time and effort they will have to pump into construction is a common stumbling block.
Factor 6: Loan
Unless you’re one of the lucky ones, the chances are you’ll have to take out a loan to build your home.
There are two particular types of loans to consider when assessing financing for a home construction in Malaysia:
Land loan – Covers a loan for the purchase of a plot of land only. There are a number of products on the market, which generally cover a specific type of land such as residential or commercial. Much like home loan financing, the financing amount tends to cover up to approximately 85% of the cost of residential land.
Land and construction loan – This loan type also offers financing for construction, alongside the land loan itself. With a properly budgeted build plan, this construction element should cover everything from contractor costs right through to the payment of permits.
Like any big financial agreement, you’ll need to provide detailed evidence of your costs to apply for this loan.
That can include elements such as the Land Title, blueprints of design, quoted contractor costs, relevant documents from the local Land Office etc.
Factor 7: Permits
Administration costs money, that’s true whether you’re buying a new home or building your own. That means paperwork and permits must be factored into your budget.
Your surveyor and architects should already be advising you of the rules and regulations you will need to follow, but now it’s time for your lawyer to earn their keep.
With the outline of your plans in place, and financing already considered, it’s time to get those pesky permits sorted.
The individual requirements and permits may vary by location, but ultimately there are four key steps you'll need to take:
Department to apply from
Local Authority Land Office/Department of Director General of Lands and Mines
Application for land ownership and transfer
Local Authorities Planning Department
Application for planning permission
Local Authorities Building Department
Application for building plans
Local Authorities Engineering Department
Application for road and drainage plan, and earthworks plan
Factor 8: Construction site
Open communication with contractors is essential when it comes to successfully delivering a house build, and that should include good understanding of the construction site.
You need to know if there are additional costs expected of you in establishing this site, or whether it’s covered in the agreement you have with your builders.
You don’t want to discover you’re suddenly forking out for a 12-month hire of some portable toilets!
More important than the question of toilets (at least in the short term…), is any cost of preparing the site, especially if buildings on your plot of land need to be removed.
This is all about preparing for the long, terrifying, exciting, amazing, probably stressful build ahead!
Factor 9: Materials
You should already have a good outline of the materials you want to use from your architectural and structural plans.
Remember that material costs can fluctuate, particularly if the earlier stages of permits and planning have taken longer than expected.
Remember also that if you’re importing any materials from abroad, currency fluctuations can also impact expected costs.
That Norwegian timber you always wanted won’t be at the same price now, as it will be in six months ahead.
It’s best to understand with your contractors when and where they will be buying materials, especially if you’re going for high-end quality materials for particular elements of your project.
This means you’ll have a good idea of budget at the outset, and a good idea of where it might change.
Factor 10: Interiors
With the beautiful exteriors on the way to completion, you should now begin to plan your interiors!
We're sure you’ve got a good idea in mind of what this might look like, but it’s down to the fine points where costs can start to come in.
Here are some great living room design ideas to inspire you! Though, one thing to remember here is that interiors are not for life.
If your budget is becoming stretched, you could always go for a more affordable and practical interior design idea now, with the promise that you’ll upgrade to that dream kitchen or bathroom later.
Sure, it might be aspirational to have that stunning Italian wallpaper and hardwood floors, but it’s not the same sacrifice as removing two bedrooms because you’re fixated on the budget for fittings.
If you have the budget, and the desire, you could always hire a professional interior designer to really deliver on that final piece of your dream home.
BONUS FACTOR: Obtaining the CCC
You may be thinking, "What on earth is a CCC, and why should it concern me?!"
We're here to tell you that the CCC (Certificate of Completion and Compliance) is a very important aspect of the property development process.
You see, it's an assessment that's carried out and signed off to ensure that a building has been safely and securely constructed according to its original plans, as well as that it's fit for habitation.
How it works is that it must be signed by a registered professional within a relevant field (such as an engineer, architect, or building draughtsman) who has an overview of the entire construction.
As such, having this piece of important document will allow you and your loved ones to move into your own self-created home with peace of mind because after all, a host of experts would have already thoroughly examined the property and declared it safe for humans to live in!