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Uncovering the Secrets of Home Building Costs: The Complete Guide from A to Z

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Uncovering the Secrets of Home Building Costs: The Complete Guide from A to Z

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1. Introduction

Owning your own home is the dream of every individual. However, the process of building a house is not as easy as buying a ready-made house. There are many factors that need to be considered, especially in terms of the cost of building a house . This article will reveal the secrets and provide a complete guide on the cost of building a house, from the planning stage to implementation.

The Importance of Owning a Home

Owning your own home not only provides a sense of security and stability, but is also a form of long-term investment. In addition, by owning your own home, you have the freedom to modify or renovate according to your wishes and needs. More about house specifications .

Option to Build a House on Own Land

If you choose to build a house on your own land , you have freedom in determining the design, size, and materials used. This allows you to have a home that truly reflects your style and personality. Check out our project location .

Advantages and disadvantages

  • Advantage:
    • Freedom in design
    • Opportunity to choose quality materials
    • Long term investment
  • Disadvantages:
    • It takes time and energy
    • Risk of costs that may exceed budget
    • Complexity in legal matters and approvals

What Will Be Discussed?

This article will discuss in detail about every aspect that affects the cost of building a house, starting from the construction budget , land status review , architect appointment , contractor selection , to loans and financing . Read our FAQ for more information .

By understanding each of these elements, you will be better prepared to begin your home building project with more confidence and knowledge. So, let’s start this journey together!

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2. Construction Budget

Building a house is a project that requires careful budget planning. Without good planning, construction costs can skyrocket and lead to financial problems. In this section, we will look at the factors that affect the budget and how to draw up a realistic budget.

Factors Affecting the Budget

  1. Land Location : Land in strategic areas or close to public facilities is usually more expensive.
  2. Size and Type of Home : Larger homes or complex designs will cost more.
  3. Construction Materials : The selection of materials such as cement, wood, or IBS panels will affect the cost. More about the IBS panel .
  4. Labor Wages : These costs depend on the duration and labor requirements.
  5. Surprise Costs : These include additional costs that may arise such as project delays or changes in plans.

Formulate a Realistic Budget

  1. Market Research : Do market research to find out the price of land, building materials, and labor wages.
  2. Get Quotes : Get quotes from several home contractors to compare costs. Get a quote from us .
  3. Consultation with an Expert : Consult with an architect or financial expert to get a clearer picture.
  4. Financial Simulation : Use the bank financing eligibility calculator to find out what you can afford.
  5. Budget Proposal : There is always a budget proposal to cover unexpected costs.

The Importance of Controlling the Budget

Controlling the budget is the key to success in home building projects. This not only helps you to avoid any financial problems but also ensures that the project is completed on time.


Building a home is a big decision that requires careful budget planning. By understanding the factors that affect cost and creating a realistic budget, you will be better prepared to begin your project.

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3. Review of Land Status

Before starting a house construction project, one of the important steps that is often overlooked is the status check of the land. Understanding the type and status of the land is critical to ensure your project goes smoothly and avoid any legal problems in the future.

Types of Land and Their Uses

  1. Malay Reserve Land : Can only be owned by Malays or corporate bodies wholly owned by Malays.
  2. Agricultural Land : Can only be used for agricultural activities and requires approval for other purposes.
  3. Building Land : Land that has been approved for building construction.
  4. Commercial Land : Land that can be used for business activities.

The Importance of Having a Legal Land Grant

Having a valid land grant is important to avoid any legal problems. This also simplifies the process of applying for a bank loan or LPPSA loan . Check your bank and LPPSA loan eligibility .

Land Status Review Steps

  1. Physical Inspection : Visit the land site and check its condition.
  2. Record Review : Perform a review of land records at the Land and Mines Office.
  3. Grant Inspection : Ensure the land grant is valid and there are no disputes.
  4. Consultation with a Lawyer : Obtaining legal advice to ensure that all documents are valid.

Costs Involved

  • Payment to the Land Office : Usually in the range of RM50 to RM100.
  • Fees to Lawyers : Depends on the complexity of the problem, if any.
  • Survey Cost : If necessary, this cost should also be taken into account.


Understanding the status and type of land is an important step in the home building process. This not only affects the type of house that can be built but also affects the overall cost of the project. So, make sure you do a thorough review before starting your project.

DALL·E 2023 10 16 16.54.28 Photo of a stylish new housing development showcasing various house designs with greenery around

4. Appointment of Architects

Building a house is not an easy task and requires expertise in many fields, one of which is architecture. The appointment of an architect is one of the most important decisions that will affect the final outcome of your project, including construction costs.

Architect Selection Criteria

  1. Experience and Expertise : Choose an architect who has experience in the type of project you want.
  2. Portfolio : Check the architect’s portfolio to assess the quality of their work.
  3. Reputation : Read reviews and get references from previous customers.
  4. Pricing and Cost : Make sure you understand the pricing structure and what is included in the package.

Plan Approval Process by Local Authority (PBT)

Once the house plan is completed, it needs to get approval from the Local Authority (PBT) . This process usually takes time and there are costs involved. Check the list of PBT in Selangor .

  1. Plan Submission : Submit a plan to PBT for graduation.
  2. Inspection and Approval : PBT will inspect the plan and grant approval if it meets the requirements.
  3. Cost : There is usually a fee to be paid to the local authority, and it varies depending on the location and type of project.

Advantages and Disadvantages of Architect Appointment

  • Advantages :
    • Get a professional design
    • Ensure all technical and legal aspects are met
    • Assist in the plan approval process
  • Disadvantages :
    • Additional cost for service
    • A process that may take time


The appointment of an architect is an important step in the house building process. They not only help in planning but also ensure that all legal and technical aspects are met. Although there are costs involved, the decision to hire an architect usually leads to more satisfying results and a smoother project.

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5. Selection of Contractor

Once your house plan has been approved, the next step is to choose a house contractor who will carry out your project. The selection of a contractor is one of the most critical decisions that will affect the quality and overall cost of the project.

How to Choose a Suitable Contractor

  1. Reputation and Reviews : Look for a contractor with a good reputation and positive reviews from previous customers.
  2. Experience : Make sure the contractor has experience in the type of project you want.
  3. Quotes : Get several quotes and compare the costs and services offered. Get a quote from us .
  4. Licenses and Certificates : Make sure your contractor is registered with CIDB and has all the necessary licenses.

Importance of Contractors Registered with CIDB

Contractors registered with CIDB ensure that they comply with all industry standards and regulations. This gives you quality assurance and peace of mind in your project.

Aspects of Contracts and Agreements

Before starting work, it is important to understand and agree to all terms and conditions in the contract or agreement. This includes work schedules, costs, and liabilities.

Costs Involved

  • Labor Wages : This is one of the largest cost components in a construction project.
  • Building Materials : This cost will depend on the type and quality of materials you choose.
  • Additional Costs : This includes costs for permits, insurance, and any delays that may occur.


The selection of a contractor is one of the most important aspects in ensuring the success of your home construction project. By choosing an experienced contractor, registered with CIDB, ​​and offering competitive prices, you will ensure that your project runs smoothly and on budget.

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6. Letter of Agreement and Capital Budget

After choosing a suitable contractor, the next step is to sign the agreement and prepare the capital budget for the project. In this section, we will discuss the aspects that need to be observed in the letter of agreement and the sources of capital and loans that can be used.

Aspects to Consider in the Letter of Agreement

  1. Work Schedule : Establish a clear work schedule, including the start date and completion date of the project.
  2. List of Materials : State the type and quality of materials to be used.
  3. Costs and Payments : Set the payment structure, including upfront payments and installment payments.
  4. Indemnity : Establishes the terms of indemnity for delay or failure to comply with specifications.
  5. Additional Terms and Conditions : This includes warranty, insurance, etc.

Capital and Loan Sources

  1. Own Savings : If you have enough savings, this is the easiest source of capital.
  2. Bank Loans : Many banks offer housing loans with various terms and interest rates. Use our home loan calculator .
  3. LPPSA Loan : If you are a civil servant, you can apply for a housing loan from the Public Sector Housing Loan Board (LPPSA) . Check your eligibility .
  4. Withdrawal of EPF Account 2 : You can also use savings in EPF Account 2 to finance projects. Learn more .


Signing a clear agreement letter and preparing a capital budget are two critical steps in ensuring your home construction project goes smoothly. Make sure you understand all aspects of the agreement letter and choose the capital or loan source that best suits your needs.

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7. Construction Process

Once all the preparations are done, it’s time to start the construction process. In this section, we will discuss the steps in the construction process, the time required, as well as the importance of monitoring during the project.

Steps in the Construction Process

  1. Site Opening : This is the first step where the site will be cleared and prepared for construction.
  2. Foundation Construction : This includes works such as excavation, foundation casting, and piling installation.
  3. Structure and Walls : At this stage, the building structure and walls will be built. Consider using an IBS panel .
  4. Roofing and Covering : The roof will be installed and the building will be closed for interior work.
  5. Interior Works : This includes electrical installation, plumbing, and interior finishing such as paint and tiling.
  6. Final Inspection : Prior to delivery, a final inspection will be carried out to ensure all work is completed properly.

Time Period and Monitoring

  • Time Period : The time period for house construction depends on many factors including the size and complexity of the project.
  • Monitoring : It is very important to monitor the construction process regularly. This ensures that all work is done according to specifications and within the specified time frame.

Costs Involved

  • Labor Cost : This is one of the largest cost components and depends on the duration of the project.
  • Material Cost : This will depend on the type and quality of materials used. Compare between IBS panels and bricks .
  • Surprise Costs : There is always the possibility of additional costs or delays that can affect your budget.


The construction process is the stage where your dreams come true. With good planning and careful monitoring, you can ensure that your home is built to high quality and within budget.

DALL·E 2023 10 19 15.49.13 Photo of a construction site in Malaysia showcasing the foundation and initial stages of a residential building

8. Project Inspection and Handover

After the construction process is completed, the next step is the inspection and handover of the project. This is a very important final stage to ensure that all aspects of the project have been completed well and according to the specifications that have been set.

Inspection by Authorities

  1. Inspection by PBT : The Local Authority will carry out an inspection to ensure that the building complies with all codes and regulations.
  2. Occupancy Qualification Certificate (CF) : This certificate is issued by PBT after ensuring that the building is safe to occupy.

Inspection by Owner and Contractor

  • Physical Inspection : Perform a physical inspection to ensure that all work has been completed according to specifications.
  • Checklist : Uses a checklist to ensure that all items in the contract have been implemented.
  • Document Verification : Ensure all documents, including warranties and certificates, are submitted by the contractor.

Submission Process

  1. Key Handover : This is symbolic of handing over the project from the contractor to the owner.
  2. Final Payment : Make final payment to the contractor after ensuring that all work has been satisfactorily completed.
  3. Documentation : Store all documentation related to the project for future reference.


Project inspection and handover is the final stage in the home building process. By conducting a thorough inspection and ensuring that all documents are complete, you will ensure that your project is completed successfully and in accordance with all applicable specifications and regulations.

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9. Maintenance and Ownership Costs

Once your home is ready to be built and handed over, don’t forget that there are other costs that will arise as part of owning and maintaining a home. In this section, we will discuss some of these costs and how to plan for them.

Routine Maintenance Costs

  1. Cleaning : This includes the cost of routine cleaning and also the cost of professional cleaning services.
  2. Repairs and Maintenance : This includes the cost of repairing any damage or wear and tear that occurs over time.
  3. Utilities : This includes bills such as electricity, water, and gas.

Unexpected Costs

  • Structural Damage : This can include damage due to natural disasters or structural failure.
  • Major Repairs : This includes major projects such as replacing the roof or plumbing system.

Insurance and Excise

  1. Home Insurance : It is highly recommended to have sufficient insurance policy to protect your home.
  2. Property Tax : This is an annual tax payable to the local authority.


Owning a home is a long-term commitment that involves various types of costs, both routine and unexpected. By planning carefully, you can ensure that you are prepared to handle all of these costs and enjoy your home for years to come.

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10. Summary and Next Action

Having gone through all aspects related to the cost of building a house, from initial planning to maintenance, we have discussed many factors that need to be taken into account. In this final section, we’ll summarize all the important points and provide some action steps you can take next.

Summary of Key Points

  1. Planning and Budgeting : Understanding the requirements and setting a budget is the first step in ensuring the project runs smoothly.
  2. Land Selection and Architect Appointment : These two aspects significantly affect the cost and quality of the project.
  3. Selection of Contractors and Letter of Agreement : Choosing the right contractor and understanding the letter of agreement will avoid many problems.
  4. Construction Process : Understanding the steps in the construction process and monitoring progress is key to project success.
  5. Inspection and Handover : Conducting thorough inspections ensures all aspects of the project are completed properly.
  6. Maintenance Costs : Planning for maintenance costs will ensure you enjoy your home in the long run.

Next action

  1. Contact Us : If you have any questions or need further assistance, please do not hesitate to contact us .
  2. Eligibility Calculator : Use our bank financing eligibility calculator to understand your affordability.
  3. Get a Quote : To know more about the costs that may arise, get a quote from us .


Building a home is one of life’s biggest decisions, and understanding all aspects involved, including cost, is essential to the success of the project. With the information and guidance in this article, we hope you will be better prepared to start your journey in building your dream home.