The house prices in Australia over the last ten years have almost doubled, which is good news for current homeowners who are presently enjoying a massive return on their investment. But many are now thinking of moving, downsizing, or upgrading their properties. There are plenty of houses for sale in Australia, Melbourne being an ideal spot as a fast-growing liveable cosmopolitan city.
But for locals, keeping this desired address is a top priority. Instead of new home sales or renovations, knock-down rebuilds, where homeowners demolish their current abodes and then rebuild a new one in their place, have become the trend.
Knock-down rebuilds are cost-effective, with an average of $20,000 for the demolition and $350,000 for the rebuild—which is more affordable than a renovation. They also give people the flexibility to customise their space while maintaining equity.
Further Reading: Want to know the costs to build a house in Melbourne? Read Soho’s guide.
Knock-Down Rebuild Versus Renovation
It’s important to assess whether you should do a knock-down rebuild or a renovation. Each option has its pros and cons, and the trade-offs you’re willing to make depend on your end goal.
Many people are choosing knock-down rebuilds over renovations primarily because it’s more cost-effective. For example, the average cost of a kitchen renovation in Melbourne is around $50,000, which is already a considerable fraction of the average $370,000 cost of a full knock-down rebuild—and that’s just one part of the house!
Additionally, while renovations appear less intimidating, they may carry unforeseen costs, disruptions, and construction issues, racking up your bills (and problems) as you go along.
Further Reading: Guide to Kitchen Renovation Costs in 2023
Advantages of a Knock-Down Rebuild
Here are some pros to doing a knock-down rebuild:
Lower Costs
Knock-down rebuilds are a more cost-effective option than buying a new house. It can even be cheaper than renovating or remodelling, both of which tend to blow out budgets.
Design and Construction Control
With a rebuild, you get full control of the design, building the home you envision. Builders also get a better grasp of the construction; no need to guess about the work of previous builders.
Address Retention
If you already like the area you’re in, you don’t have to give it up when you opt for a knock-down rebuild. You still get an upgraded home in the neighbourhood you love.
New Materials and Warranties
With a knock-down rebuild, you work with new, often stronger, and more high-tech materials that could extend the lifespan of your home. With these new materials, there are also new warranties that could come in handy down the road.
The Cost of a Knock-Down Rebuild
The first cost of a knock-down rebuild is the demolition, which averages around $20,000. This price can be lower or higher (up to $40,000) depending on the size of the property, the home’s foundation, the required equipment for demolition, the removal of pests, trees, and other structures, and permit costs. Victorian buyers can use a cost calculator tool for a more precise demolition estimate. You may also have to pay for additional excavation.
Once the land is ready, the rebuild starts. Your expenses here depend on several factors, including the size of the new build, the complexity of its design, the materials to be used, the number of people needed to finish the job within the given timeline, etc. In Melbourne, the average cost of building a house is $350,000, but a good ballpark figure is to start at $500,000 for a rebuild.
Other Unexpected Costs to Watch Out For
You may incur additional costs if there are obstacles that inhibit equipment access to your home (e.g. if you’re on a tight street or major highway) and if there are other structures underneath the house to be demolished such as old pipes. One of the largest extra expenses, though, comes when there’s asbestos or mould in the home, which could cost you up to $10,000 more.
Start with Property in Melbourne
If you’re looking for a home in Melbourne, either a new house, a knock-down rebuild, or an old property to play with, search for it with Soho. You can download the app for the full experience, where you can even shortlist properties you can see as your future home!
