We’re now a decade on from our first post about the cost to build a tech startup, and it’s time for another update. After writing about Australian startup development costs in 2019, the landscape has shifted dramatically, particularly with the explosion of AI tools and changing developer economics.
If you’re planning to launch a startup in 2026, here’s what you need to know about application development costs.
The 2026 landscape: What's changed
The startup development world in 2026 looks vastly different from even a few years ago. Three major factors are reshaping costs:
- AI-assisted development: Tools like GitHub Copilot, Cursor, and Claude have made developers significantly more productive.
- No-code/low-code maturity: Platforms have become sophisticated enough to handle complex business logic, making them viable for early-stage startups.
- Developer salary inflation: Despite productivity gains, experienced developers command premium rates due to high demand and the complexity of modern tech stacks.
Current development costs in Australia
Based on our experience working with Australian startups, here’s what founders can expect to invest in 2026:
Full MVP development
- Simple web application: $35,000 - $60,000
- Medium complexity web app: $60,000 - $120,000
- Complex platform: $120,000 - $250,000+
It’s important to remember the variables that impact these costs. Things like the UI / UX complexity required (think full featured user dashboard vs a simple AI Agent ‘chat’ interface), if an AI Agent is required what unique data are we working with, plus the usual feature list that might be required.
These figures represent significant efficiency gains compared to 2019. A medium complexity marketplace that cost $50,000-$60,000 in 2019 can now be built for similar money regardless of inflationery factors, thanks to AI tooling and modern frameworks.
Developer rates in Sydney and Canberra (2026)
Salaries and contract rates for senior developers have continued to rise:
- Senior Full-Stack Developer: $150,000 - $200,000 salary (or $800-$1,200/day contract)
- Senior React/Frontend Developer: $130,000 - $190,000 salary (or $700-$1,000/day contract)
- Senior Backend Engineer (Python): $150,000 - $210,000 salary
- DevOps/Infrastructure Engineer: $160,000 - $230,000 salary (or $1,000-$1,500/day contract)
- AI/ML Engineer: $180,000 - $250,000+ salary (this role barely existed in 2019)
- CTO: $250,000+ salary
While these rates might seem high, remember that AI tools have made these developers more productive than they were just a few years ago.
Note that salary and contract rates vary dramatically. Your own experience might be very different.
AI-powered features are now expected
Interestingly, while AI reduces development costs in some areas, users now expect AI-powered features in products. Adding smart recommendations, natural language interfaces, AI Agents or AI-driven insights can add $15,000-$50,000+ to your MVP, depending on complexity.
What should your first version include?
The MVP philosophy remains critical in 2026. Focus on:
- Core value proposition only: What's the one thing that makes your product valuable?
- Manual processes are OK: If something happens infrequently, do it manually at first
- Limited user management: Start with basic auth; add social login and advanced features later
- Simple admin tools: Keep it simple and try to avoid building custom admin panels. For example, leverage the AWS UI where possible.
Hidden costs to budget for
Beyond development, factor in these 2026 costs:
- Infrastructure: $100-$500/month (Vercel, AWS, Webflow etc.). This figure can vary dramatically. The good news is that it usually increases drastically once you user base, and usage of your product, grows.
- AI API costs: $100-$1,000/month depending on usage. These aren't fixed costs and again depend on usage and LLM model used.
- SaaS tools: $50-$800/month (analytics, customer support, email, etc.). At MVP you can keep costs very low on this front and invest further as your user base grows.
- Legal/compliance: This one really depends on what you're building and what industry you're working in. Most MVPs can keep legal costs very low when starting out but if you're working in FinTech, HealthTech or a heavily regulated field then your costs could be much higher.
- Design assets: $1,000-$10,000+ (logo, brand guidelines, UI kit). There are ways to get around this when at a very early stage. If we're building a startup for you please ask us how.
The bottom line
Developing a startup in 2026 is both cheaper and more expensive than in previous years. It’s cheaper because AI and modern tools let you do more with less. It’s more expensive because user expectations have risen, and experienced developers who can leverage these tools command premium rates.
The key is being strategic:
- Validate first: Use smoke tests when possible and be sure to talk to your customers.
- Leverage AI: Whether you're technical or not, AI tools can reduce costs. A good example for non-technical founders is to research their idea heavily using the latest available 'Pro' models (currently ChatGPT 5 Pro, Gemini 2.5 Pro, Claude 4.5) and to use LLMs to generate a development brief (specification). Be sure to ask the LLM to be critical with your features and ensure it knows this is MVP and you want to run lean (unless you don't, but beware!).
- Focus ruthlessly: Build only what differentiates you; use existing solutions for everything else
- Plan for iteration: Budget for changes, enhancements and potentially future development cycles, not just the first build
The average startup MVP in Australia in 2026 costs between $40,000-$70,000 for custom development, or as little as $5,000-$15,000 using no-code approaches. The right choice depends on your market, technical requirements, and validation stage.
Ready to build your startup?
Launch Lab has developed more Australian startups than just about any other company. Whether you need help with strategy, a marketing website, full startup development, AI development or just advice on the most cost-effective approach, we’re here to help.
Launch Lab is a startup development company in Sydney and Canberra. We help founders move from concept to launch using modern development practices, AI-assisted development, and lean methodologies to maximize value and minimize risk.