Not sure whether to knock down and rebuild or extend and renovate? Renovation & Extensions can help you work out which path suits you best.
If you love your location, your local schools, your neighbours (good ones are a real blessing) and your garden, moving probably isn’t on the cards. But what do you do when your home no longer fits your family’s needs?
Stamp duty is a big factor. With the median house price in metropolitan Melbourne approaching a million dollars, stamp duty alone comes to around $55,000. In the pricier suburbs, that figure can easily double or triple.
If you’re staying put, the next question is whether to extend and renovate or start fresh with a new build.
Budget and borrowing capacity matter, of course. But it’s also worth thinking about the character of your street and the waste created when an entire home is demolished.
Older homes have a charm that new builds struggle to replicate, and they were built to last. That’s why character homes still look so good decades on. Watch any family-themed TV ad and you’ll likely spot an older-style home in the background. These homes feel familiar and welcoming, and they have a soul of their own.
“Is it cheaper to extend or to knock down and rebuild?” is the question we hear most. The answer depends on the scope of the project, your location and your design preferences. As a general rule, though, a full knockdown rebuild costs more once you add demolition, site works, landscaping and temporary rent.
Second-storey extension
Estimated cost of turning a 3-bedroom, 1-bathroom, 1-living home into a two-storey home with 5 bedrooms, 2 bathrooms and 2 living areas:
Total approx. $350,000*
*Conditions apply
Knockdown rebuild
Total approx. $1,030,000*
*Conditions apply
A well-planned extension typically takes about 6 months, while a knockdown rebuild usually runs 12 months or more.
Time is money, so confirm exact timelines with your builder and decide which option best suits your family’s situation.
An extension is about more than adding space. It’s a chance to shape your home around the way you live.
Many knockdown rebuilds are based on off-the-plan designs, so if you go that way, document your requirements clearly and confirm how much customisation you’ll actually get.
Knocking down your home means you’ll be without one for a while, so weigh up current market conditions and the risks of a full rebuild. An extension builds on what you already have, which naturally carries less risk.
The state of the construction industry also matters. Labour costs and the availability of skilled trades can affect both extensions and rebuilds. In a booming market, labour and material prices rise, which can put real pressure on a rebuild budget. Always factor in current conditions when deciding.
If your property has a heritage overlay, an extension is often the only option permitted. Preserving your home’s character should be a key part of your decision.
Local planning rules and zoning can also have a big impact. A rebuild may need to meet newer and potentially stricter requirements, which can limit your design options and add cost. Extending the existing structure often allows more flexibility while still meeting established guidelines. Make sure you understand these constraints before you commit.
Why demolish a home that can be built on? Extending is almost always the better choice for the environment.
If you’ve already invested in a new kitchen or re-stumping, a knockdown means that money is wasted. If you do go down that path, think about which materials and fixtures can be reused in the new build.
The choice between extending and starting fresh isn’t only about cost. Timeframes matter too. An extension often lets you stay in your home while work is underway, whereas a rebuild adds months of demolition, site works and temporary accommodation costs.
Watch our video, where the Renovation & Extensions team explains how the timelines compare, so you can see which option best fits your budget, lifestyle and long-term goals.
Extending lets you keep your home’s architectural character, often at a lower cost than a full rebuild, and gives you more living space without having to move. It can also add to your property’s value.
That said, available space and zoning rules can limit what’s possible, and building work can temporarily disrupt daily life. Careful planning and a clear budget help ensure the benefits outweigh the drawbacks.
old and new blend together seamlessly.
fewer new materials are needed.
a well-executed extension can significantly lift resale value.
design the space around your lifestyle and needs.
on heritage overlay properties, an extension is often the only allowable option.
Tell us what you want to improve, change or add to your home.
Melbourne home renovation and extension specialists creating practical, beautiful spaces for modern living.
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