I build custom homes, so I am not neutral on this. What I can do is set out the differences plainly, because the right answer depends on your block and your brief, not on which kind of builder you ask.
What is the difference between a custom home and a project home?
A project home starts from a builder's existing design, chosen from a range and adjusted with options. A custom home starts from your block and your brief, and is designed from scratch, usually by an architect or building designer, before a builder prices it.
| Project home | Custom home | |
|---|---|---|
| Design starts from | An existing plan in the builder's range | Your block and your brief |
| Who designs it | The builder's in-house team | Usually an independent architect or building designer |
| Changes | Options and upgrades within the plan | Anything, before the contract is signed |
| Suits | Blocks the plan was designed for | Blocks and briefs no standard plan fits |
How does your block change the choice?
The block is usually what decides it. A standard plan assumes a standard block: a certain width, a certain fall, a certain orientation. The further your land is from that, the more a standard plan has to be adapted, and the more a design drawn for the site makes sense.
- Slope. A plan drawn for flat land has to sit on a slope somehow: cut, fill, retaining or a raised floor.
- Width and shape. Narrow and irregular lots limit which plans fit at all.
- Orientation and views. A plan that faces the street may turn its back on the sun or the view.
- Existing house. In a knockdown rebuild, the street and the neighbours are already set.
Wollongong has plenty of land that is not standard, especially along the escarpment. Wombarra Clifftops, the CKS home that won Contract Homes $1.9M–$2M at the 2026 MBA NSW Southern Regions Excellence in Building Awards, is a split-level custom home built as a knockdown rebuild on a clifftop, where the design had to answer engineering, stormwater and slope challenges from the start.
How is each one priced?
A project home is priced from a standard plan, then adjusted for your site and your options. A custom home is priced from its own drawings. Either way, what matters is how much of the contract price is fixed and how much is allowances.
Ask the same questions of both:
- What site costs are in the price, and what is excluded?
- Which items are provisional sums, and why can they not be fixed?
- Which fittings are prime cost allowances, and do the amounts match what you want?
- What margin applies if an allowance is exceeded?
The provisional sums page explains how allowances work under the NSW contract and why they push budgets over.
What is the same for a custom home and a project home?
The law does not change with the type of home. In NSW both need the same written contract, the same home building compensation cover and the same limits on deposits and progress payments. The checks you make on the builder are the same too.
- A written contract for work over $20,000, with the required contents and a cooling-off period.
- A deposit of no more than 10 percent, and progress payments that match the work done.
- Variations in writing, signed by both parties.
- A current contractor licence and an insurance certificate before you pay anything.
The choosing a builder page sets out how to check the licence and the certificate yourself.
Which one suits you?
A project home suits a block that matches the plan and a brief the range already answers. A custom home suits a block or a brief that no standard plan fits. If you are unsure, have someone assess the block before you choose a plan.
That is how I start every CKS job: I run the site assessment myself, before any design or price, because the block tells you which kind of home it will carry.
- Home construction in the Illawarra, explained: the stages, approvals, BASIX and warranties.
- Stages of a new home build, from slab to handover: what happens on site and when.
Sources
Checked on 29 September 2026.
- NSW Government, Contracts for residential building work: written contracts, deposits, progress payments and variations.
- Master Builders Association of NSW, 2026 Southern Regions Excellence in Building Awards winners: Wombarra Clifftops.
- CKS Projects, Wombarra Clifftops: split-level custom home, knockdown rebuild, clifftop site.
General information from a builder, not legal advice. Confirm current requirements with Building Commission NSW.