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Extension vs Knockdown Rebuild

Achieve your dream home with your existing house

Trying to decide whether it’s better to knock-down and rebuild or extend and renovate your existing home? We can help you decide.

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HIA 2022 Finalist
Professional small builder/renovator

This piece has been crafted by Neil Gardiner and Matt Howard

When comparing the costs of extending versus a complete rebuild, clients often find that rebuilding can be two to three times more expensive than extending. Plus, the potential savings from staying home during construction, as opposed to renting elsewhere, are significant, especially given the current rental market challenges.

Matt Howard

Managing Director

Should you move, knock down and rebuild, or extend and renovate your existing home?

If you like where you live - the location, schools, your neighbours (let’s face it, good neighbours are a blessing) and your garden - moving may not be an option. So what do you do with your home if it doesn’t meet your families current needs.

Stamp duty is a major consideration and with a median house price in metropolitan Melbourne nudging a million dollars the stamp duty alone is $55,000. Start looking at the more expensive suburbs around Melbourne and this figure can quickly double or triple.

If you’re going to stay at your current address the next consideration is do you extend and renovate my existing home, or would you be better off with a fresh start?

Obviously cost and borrowing capacity is a major consideration. But have you considered streetscape character and the waste that is generated in demolishing entire structures?

Old homes have character that is not easily repeated in new home builds. And they have been built to last – how is it that character homes can look so good despite being decades old? Watch any advertisement on the television if the ad has anything to do with family there will be an older style home in the background. They are familiar and welcoming and can have a soul of their own.

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Looking at extending your single or two-storey home? Give us a call or book a complimentary design consultation with us.

What to consider

Here are some of the major factors to consider when deciding between a knockdown or an extension.

Factor 1: Cost

Is it cheaper to extend or knockdown and rebuild? This is the most common question we get. The cost comparison between extending a home and knocking it down for a complete rebuild depends on various factors, including the scope of the project, location, and specific design preferences.

A complete knockdown rebuild generally involves a higher estimated cost, including demolition, landscaping, rent, and site work.

Second storey extension

Estimate costs on seconded storey extension which would involve converting a 3 bedroom + 1 bathroom + 1 living into a 2 storey, 5 bedroom, 2 bathrooms, 2 living area space.

Total approx $350,000*

*Conditions apply

  • $850,000 to custom build a new character home
  • $30,000 demolition and site clearance 
  • $100,000 site works, excavation and landscaping
  • $50,000 rent costs @ 12 months (If available)

Total approx $1,030,000*

*Conditions apply

Factor 2: Time

A well-planned extension is likely to take around 6 months, versus a knockdown rebuild which will be around that 12-month plus mark. 

Time is money, so make sure you understand the exact timelines with your builder and work out which option is best for your family situation.

Factor 3: Customisation

Extending your home, is not just about adding space it's about making your home unique to your lifestyle.

Many knockdown rebuilds can be off-the-plan homes, so be sure to document your requirements and get the levels of customisation you need in your project.

Factor 4: Risk

Knocking down your house essentially leaves you without a home for a period of time. So consider the current market conditions and the risks involved in a full knockdown. With an extension, you are adding to an existing home so naturally there is less risk associated with it.

The state of the construction industry, including labour costs and availability of skilled workers, can significantly impact the feasibility of a knockdown rebuild and a home extension. In a booming building economy, labour and material costs tend to rise, potentially affecting the budget for a complete rebuild. Always factor in current market conditions to help guide you to the right solution.

Factor 5: Character

On properties with a heritage overlay, often, an extension is the only allowable option. Maintaining the character of your home should be a major factor in your decision-making process.

Local planning regulations and zoning restrictions can significantly impact your project. Before making a choice, it's essential to understand these constraints thoroughly. A complete rebuild may require adhering to newer, potentially stricter regulations, which could limit design flexibility and increase costs. Conversely, extending within the existing structure may provide more leeway while still complying with established guidelines.

Newly renovated home

Factor 6: Sustainability

Why knockdown something if it can be rebuilt, an extension is no doubt a better for the environment.

If you have already spent money renovating the kitchen or re-stumping, then knocking down the house is like pouring money down the drain so if you are goign down that path always consider what can be recycled into the new build

See what we can do

Have a look at our recent projects to get a feel for the type of transformation you can expect in your own home. Get ideas, be inspired, and then we’ll create your perfect home.

Californian bungalow in Coburg
  • New open plan living area
  • New outdoor entertaining area
  • Redesigned and renovated ensuite
Ground floor extension in Mitcham
  • New master bedroom and ensuite
  • New modern kitchen and dining area
  • New alfresco area
Ground and second storey extension in Kew
  • Ground floor extension with new open living, kitchen, and dining area.
  • First floor extension with two new bedrooms.
  • Master bedroom with luxury ensuite.

Considering a multi-generational home?

Transform your home into a space built for your family – contact us today, and let's design your multi-generational dream home extension together!

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We create beautiful home extensions across Melbourne

Transform your home into a space built for your family – contact us today, and let's design your multigenerational dream home extension together!

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Key advantages of extending your home

Home extensions offer notable advantages such as the preservation of existing architectural character, a potentially lower cost compared to a full rebuild, and the ability to expand living space without relocating. 

They can also enhance property value. However, available space or zoning regulations may limit extensions, and the construction process can temporarily disrupt daily life. 

Careful planning and budget considerations are essential to ensure the advantages of a home extension outweigh any potential drawbacks.


  • Home extensions preserve the property's character, seamlessly blending old and new.
  • Extensions are more budget-friendly, minimising the need for new construction materials.
  • A successful home extension can greatly increase property resale value.
  • Homeowners can customise extensions to suit their lifestyle and needs.
  • On properties with a heritage overlay, often, an extension is the only allowable option.

The final word

Recap statement from Neil

We have found that a lot of our clients like their current home, it’s just that they have growing needs. Extending is a great way to retain the key parts of the home you already like and still achieve an outcome that satisfies those needs without having to throw the baby out with the bathwater.

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