How to calculate the building cost based on the square?

A builder quoted $11K/square for a double storey townhouse and calculation as follows:

Building construction: $11K x 22 Square = 242K
Garage $7K x 4 Square = $28K
drive way $15K
services connection $10K
-----------
TOTAL $295K

Is this the right way to calculate the building cost?

The cost of building the house is, for the builder, how much all the wood & the concrete & the doors & the windows & the plaster & the paint etc etc costs, as well as the cost of the labour.

How they decide to charge you, however, depends on how they handle their risk & structure their pricing. It's certainly possible that a builder might decide to price like that.

That calculation sounds reasonable, particularly as you are being charged less for the garage (as you should, as there is less work / materials / labour involved). Many companies take a total sqm (including garage and decks - which irked us as we have 100sqm of decks and garage which is why we wanted a calculation more like yours).