How much does a house extension cost in Melbourne?

More and more Australians are choosing to extend their homes rather than build new — and it’s not just a hunch. According to KPMG’s 2024 Renovation Domination report, renovation spending now makes up 40% of all residential construction activity, with Melbourne suburbs like Boroondara and the Mornington Peninsula leading the charge.

If you’re one of the many Melbourne homeowners exploring the idea of a renovation or extension, your first big question is probably: how much would it cost to extend a house? And fair enough. A home extension is a major investment, but it’s also one of the most effective ways to get more space, avoid the hassle of moving, and create something that truly suits your family.

Our seasoned design and build teams have created hundreds of house extensions in Melbourne over the past four decades. We know what drives costs up, what keeps them down, and what you actually get for your money. Of course, there’s no single price tag, but by the end of this blog, you’ll have a clear understanding of what it might cost to extend your Melbourne house, and why.

What’s the average cost to extend a house?

Here’s a quick overview of what Melbourne homeowners can expect to pay for different types of extensions. These figures are based on typical residential projects and industry benchmarks:

[table][thead][tr][th]Type of Extension[/th][th]Estimated Cost Range[/th][/tr][/thead][tbody][tr][td]Ground floor extension[/td][td]$100,000 – $350,000[/td][/tr][tr][td]Second storey extension[/td][td]$300,000 – $500,000+[/td][/tr][tr][td]Kitchen/bathroom inclusion[/td][td]+$20,000 – $50,000 per wet area[/td][/tr][/tbody][/table]

These are averages taken from our last twelve months of sales — your final price will depend on size, complexity, finishes, and site conditions. But it’s a good starting point to help you budget realistically. As a custom builder, Supa Group does projects that reflect our clients' needs. Over the past 12 months, we have had contracts that range from $180,000 to $900,000, including GST.

And yes, those prices may seem like a lot at first glance. But compared to the cost of buying, selling, and relocating (not to mention stamp duty), an extension can be a smarter long-term move.

Key factors that affect your home extension costs

Every house extension project is unique, but here are some of the most common factors that influence the final cost:

Size and complexity: More square metres will naturally increase your total spend. However, going vertical (such as adding a second storey) introduces structural complexities that need to be put into consideration..

Site conditions: Sloping blocks, reactive soil types, or limited access can require additional excavation, support systems, or scaffolding. These extra site considerations can also add thousands to your project cost and may impact your builder’s timeline.

Design complexity: A clean, rectangular layout is almost always more cost-effective than something more architecturally complex. Features like split levels, curves, cantilevers, or high-performance glazing tend to carry higher build costs.

Materials and finishes: Choosing high-end cabinetry, hardwood floors, feature windows, or custom joinery will raise the overall price. Every upgrade adds to your budget and increases the cost per square meter, so it’s worth considering where to invest and where to save.

Council and regulatory requirements: Your project may be subject to overlays, heritage restrictions or other permit requirements that impact the build schedule and professional fees. Some homeowners may also need to factor in planning permit requirements.

The builder you choose: Not all building companies quote the same way. A builder who offers end-to-end design-and-construct services can help you set a realistic budget early and avoid surprise costs later.

[feature_link]Got a project in mind? Here are 5 key things to consider when planning a house extension.[/feature_link]

Extension types and typical pricing

Different types of extensions serve different goals and come with different cost considerations. Whether you're adding a rear living area, adding bedrooms, building upward, or reworking your layout for multi-generational living, the scope, size, and complexity will all shape your final budget. Below, we've broken down the most common types of house extensions in Melbourne, what they typically include, and how much they tend to cost.

Ground floor extensions

This is the most common option for families wanting more space to spread out; it’s often used to add an open plan living area, an extra bedroom, or a larger kitchen and dining space. Ground floor extensions generally cost less per square metre than second-storey additions, but can be impacted by site slope, excavation, or how easily the new extension connects to your existing home.

Second storey extensions

Going up is a smart option when land is limited and you want to preserve backyard space. Second-story extensions typically cost more per square metre than ground-floor builds due to additional structural and engineering work.

We won’t go into too much detail here, because we’ve already written a full guide on the cost of a second storey extension in Melbourne. But if you’re weighing up whether to build up or out, it’s worth reading and you should always speak to us to discuss your personal circumstances.

Multi-generational or large-scale extensions

Adding a self-contained wing for aging parents? Need two new bedrooms, a bathroom, and a rumpus room for the kids? The larger and more service-heavy the extension, the more complex (and expensive) it becomes. For these kinds of multi-generational home extensions, you’re typically looking at $350,000 to $500,000+ — especially if you’re including multiple wet areas or structural changes.

In these cases, good design is essential, so your extension doesn’t feel tacked on. Supa Group specialises in seamlessly integrated layouts that feel like part of the original home.

[feature_link]Are second-storey or ground-floor extensions more expensive? Here’s how to weigh up the costs.[/feature_link]

What’s included in the price — and what’s not?

It’s one thing to compare price tags, but it’s even more important to understand what’s included in the number you’ve been quoted.

A good home extension builder will include:

• Design and documentation
• Soil testing and engineering
• Council approvals and building permits
• Demolition and site prep
• Full build, including electrical and plumbing

Some quotes may exclude things like landscaping, fencing, driveways, or appliance upgrades, so it’s always worth double-checking. Supa Group provides clear, itemised proposals so you know exactly what’s covered (and what isn’t).

Why work with a design-and-construct builder?

If you want a high-quality build without the runaround, a design-and-construct team is your best bet. Here’s why:

• You get a single point of contact — no juggling architects, engineers, and tradies.
• You get more accurate pricing early on so you can avoid scope blowouts.
• You save time and decrease risk because we’re managing the extension process from start to finish.

At Supa Group, we handle everything from the first 3D design to final inspection. That’s how we deliver projects on time, on budget, and with far fewer headaches.

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How the extension process works

It’s one thing to understand the costs — it’s another to see how it all comes together. This short video shows you what it’s like to build with Supa Group, from initial consultation to final handover.

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Ready to plan your extension?

If you’ve been crunching numbers, gathering inspiration, and wondering whether it’s worth it, the best next step is a conversation.

We’ll help you understand exactly what’s involved, how much it might cost, and how to build something you’ll love coming home to.

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Let’s plan your extension together. Our design consultants will meet you at your home to discuss what’s possible — and what it’s likely to cost.

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FAQs and insights you'll need

What’s the best way to get a cost estimate before I start planning?

Before you extend your home, it’s important to get a rough guide of your potential costs, but a truly accurate estimate depends on a few specific details. These include the size of the extension, the complexity of the design, and the condition of your existing structure. A building designer or estimator can help you understand where to begin, but a design-and-construct builder will typically give you a more complete picture up front.

Keep in mind that early estimates often exclude additional costs like permits, engineering, or interior selections, especially if you’re planning a bathroom or kitchen renovation. Make sure you understand all the costs before you commit, so you can plan your home improvement project with confidence.

Will an extension add value to your home?

Done well, a home extension or renovation can absolutely add value to your property both in day-to-day liveability and eventual resale price. Adding living space, improving flow, or creating a modern kitchen renovation often appeals to growing families and future buyers alike.

Of course, not every extension will add value to your home in the same way. Extensions are cheaper than moving house in many cases, but it’s still important to weigh your goals against your budget. A good designer will help you prioritise your investment based on your suburb, lifestyle, and long-term plans.

What’s the difference between a small extension and a renovation?

A smaller extension usually adds new space like a home office, bedroom, or second living area, while a home renovation often upgrades what’s already there. Both come with different costs, benefits, and timeframes, depending on how much of the original home is being changed.

The cost of house extensions in Melbourne tends to be higher when structural changes are involved, so even a small job may add to the cost significantly if you're reworking plumbing, adding new openings, or making major layout changes. Understanding the difference helps with planning and budgeting.

How big is a typical ground floor extension?

There’s no standard size, but an 80-square-metre ground-floor extension is often considered medium-to-large. That’s enough space to add a master suite, bathroom or kitchen, laundry, and a light-filled living area, depending on how you lay it out.

The total costs will vary depending on the materials used and the number of wet areas, but this kind of project is common for families who don’t want to move to a larger house but need more space. Good design makes all the difference when you’re trying to maximise footprint without overspending.

Can an extension be staged to manage costs?

Yes — many homeowners choose to stage their house extension or renovation over multiple phases to spread out costs. For example, you might begin with a ground floor living area, and add a bedroom or bathroom in a second stage once budget or timing allows.

This approach can be useful if you’re working within local council limits, or need to manage your cost of an extension while you’re still living in the home. It’s not always suitable for every home, especially if your home is on stumps or you’re touching multiple structural elements, but it’s worth asking about.

Is it better to extend or knock down and rebuild?

That depends on your goals, budget, and importantly the condition of your existing home. Extensions are often quicker, more cost-effective, and less disruptive if you're happy with your current layout and location. However, a knockdown rebuild might offer better long-term value if your home has serious structural issues or you're planning a complete redesign. Explore the pros and cons of extending vs knockdown rebuild to decide which approach is right for your project.