Budgeting for a Passive House in Melbourne

We really need to stop building homes like it’s 1950; there’s a better way. When it comes to building a high-performance home, there is a mountain of misinformation regarding costs. While there is no "magic number" to pinpoint the exact extra investment required, the reality is simple: quality costs money. A Passive House Melbourne build is a high-performance machine, and performance requires a higher upfront investment.

The market is often confused by oversimplified claims that building better "only costs a cup of coffee a day". These analogies miss the point entirely. Until we stop comparing the lowest legal form of housing to a standard that is superior in every way, the price gap will always be misunderstood. Honestly, I thought there would have been more research in this area, specifically to building a passive house in Australia. The reality is that passive houses cost more, and that’s ok, because like any premium product, quality costs more. No one complains that a Ferrari isn't the same price as the Mazda 3, do they?

Custom Home vs. Passive House

To understand the value, we must compare apples to apples. We aren't looking at volume or project builds, which are often built to the lowest legal standards. Instead, let's look at a standard 180sqm custom home versus a Certified Passive House builder Melbourne project. If you build to current minimum standards, you are likely to encounter a constant battle with the thermostat, indoor temperature fluctuations, and poor air quality.

A Passive House eliminates these issues by focusing on five key areas.

1. Airtightness: the last missing piece of the puzzle

Airtightness is the final piece of the energy efficiency puzzle. For reference, the average Australian home sits around 7–15 ACH (Air Changes per Hour), meaning it leaks air uncontrollably. A Passive House must achieve under 0.60 ACH.

By investing roughly an extra $25,000 in an airtightness strategy, you gain total control over your environment. This results in a 70% reduction in heating and cooling costs and a significant improvement in indoor air quality, moving away from the energy waste and draughts of a standard custom build.

2. Strategic Mechanical Ventilation

Because a Passive House is so airtight, it requires mechanical ventilation. A supply and install of a heat recovery ventilation system costs roughly $25,000. While this is an added cost, it allows you to downsize your actual heating and cooling systems significantly.

In a standard custom home, you might spend $40,000 on a hydronic heating system and another $25,000 on cooling, yet still suffer from poor air quality and high running costs. In a Passive House, that $25,000 ventilation system is paired with a much smaller $5,000–$10,000 cooling system, resulting in supreme air quality and recycled energy. It’s quite often that this area of the passive house components will save you a ton of money.

3. High-Performance Windows

Windows often account for 40% of heat loss in a home. In a standard custom build, basic double-glazed windows with "crappy" aluminium frames are common; these often leak water and are not airtight.

In a Passive House, you step up to high-quality double or triple glazing, usually with uPVC, aluclad, or timber frames. While this adds approximately $10,000–$15,000 to the budget, these windows are airtight and properly installed, ensuring the building envelope remains secure. We actually did a quick study a few years ago where we sent the same window package off to various companies and found that the uPVC windows were all on par with the cost of aluminium windows. The issue is, the aluminium glazing specifications was never able to match that of the uPVC which made it a clear winner. A typical window package for a certified passive house in Melbourne will cost you anywhere upwards of $35k, depending on the specifications, which most packages costing no more than $75K

4. Better Insulation

Insulation is relatively cheap, but the quality of the installation is what matters most. In standard homes, insulation is often compressed or left with huge gaps, and it is rarely checked. A standard custom home might have R4 in the ceilings and R2.0 in the walls, with little to no floor insulation.

A Passive House requires a continuous insulation layer to prevent thermal bridging. This typically looks like a minimum of R6 in the ceiling, R4.0–R5 in the walls, and R3–R5 in the floor. Doing it properly from the start ensures long-term performance. This is an area that can increase the cost of the home, but since insulation is cheap, you can budget for an extra $5-15k in this area.

5. Verification through Certification

Certification is the only way to correctly and independently verify that a home performs as designed. It is well-documented that many standard homes are not built to the specifications on the plans.

Passive House certification holds everyone—the designer, the builder, and the trades—accountable. While it involves roughly $8,000–$12,000 in modelling costs and $7,000 for final certification, it ensures that everything is checked, verified, and proven to work. I think the question here though is, you’re spending a lot of money on building, wouldn’t it make sense to then have it checked and verified to hold not only the builder accountable, but the whole design team to make sure you get what you paid for?

Passive House projects Melbourne certification holds everyone—the designer, the builder, and the trades—accountable. It ensures that everything is checked, verified, and proven to work so you don't become another statistic of Australian homes that fail to meet basic requirements.

The extra cost is worth it!

Building a Passive House isn't about chasing a trend; it's about building a home that prioritises your well-being. When you invest in airtightness, better windows, and mechanical ventilation, you aren't just spending more—you are choosing a home that is healthier, optimised, and more comfortable for generations to come. The reality is there is no fixed number to say what a passive house costs, or how much more it costs, but there are examples of where it has saved clients money, but also cost them a lot more. This is why having the discussion early on with your design and build team is very important! If you want to know more and chat about this, please head to the contact section and fill out the form.

At Carland Constructions, we are really the leaders in Passive House building and construction in Melbourne. We have 5 certified passive house projects completed with a few more on site. We just don’t do this for fun (well we do), but we live and breathe it. We focus our whole business on building homes that mean something, and are always learning more about building science and building better. We want to make sure we remain the expert and continue on from being known as one of the leaders in Passive House in Australia.