Knockdown rebuild versus renovation: which path makes more sense?

20 June

You’ve outgrown your home - but not your postcode.

Now comes the million-dollar question: do you renovate…. or knock down rebuild?

This is a question I see pop up on repeat in online home building groups and the answers that are given are not always the most accurate!

You could knock it down and start fresh. You could renovate and keep the memories.

One promises a clean slate. The other, a familiar foundation.

So how do you choose?

Let’s unpack this together. We’ll walk you through the key things to consider - side by side - so you can make an informed decision based on fact, and not what Freddy from Facebook is telling you 😉

Things to know about renovating

It’s ALWAYS a lot more expensive per square metre

In fact we’re talking double or even triple the cost of a new build. This relates to the number of unknowns, the added complexity of working old in with new, and the inability to fully program the process (because of those pesky unknowns!). In addition to this, if sites are difficult to access the cost might be even higher.

As we said - you’re working with unknowns

This is a frustrating one, because it certainly feels like enough planning, investigation and prep should eliminate all of the unknowns. But unfortunately, that’s just not the case. Some things won’t reveal themselves until you’re deep into the journey of the renovation process - old wiring, hidden asbestos, structural issues etc etc. So what does this mean for you? - sadly budget blowouts and timeline delays.

Living onsite won’t be the cost saving hero you might think

Want to see a builder break into a cold sweat faster than you can say “open plan kitchen”? Whisper into their ear that you plan to live onsite during the process… 🙂

I know, I know - it seems like the greatest cost saving solution of all time and you’ve got the grit to ride this out, so why wouldn’t you do it?

Well this might make you rethink… it genuinely slows the process down… a lot! It puts limitations on when trades can be onsite; there’s an added layer of complexity around keeping a portion of the site safe and habitable, while trying to run construction on another; the process has to be staged differently; and although you don’t know this yet - the builder knows that you will ask a lot of questions about what’s happening… on the daily… and this takes up time. So all of this is going to be factored into your final price. Say goodbye to any kind of rental savings and hello to an extended timeline.

Layout limitations are real

Renovating is primarily driven by working around what is already there. And a lot of the time matching this with your budget means leaving the location of certain rooms exactly where they are (think using existing plumbing locations for bathrooms and kitchens). Ultimately, this means that not everything can be ‘exactly as you want’ which on the flipside means there will always be an element of ‘putting up with’ existing elements of the original house.

It’s a blend - not a blank slate

You end up with the contrast of the history of the original house set against the brand new extension, which immediately creates interest. But - the original part of the home - while it may have been dressed up to look incredible, is ultimately still older construction. And with older construction comes reduced energy efficiency (more susceptible to extremes in temperature), and aging materials that will still require attention and ongoing maintenance.

Prepare for the budget rollercoaster

The cost of the build is much more difficult to lock down early because there are a number of things that won’t be (and can’t be) discovered until the renovation is underway (hello those pesky ‘unknowns’). This means budgets and timelines will be more fluid than with new construction, which adds another element of pressure particularly if you’re paying to rent somewhere else.

Things to know about a knock-down rebuild (KDRB)

It starts with land value only

If you’ve already paid a premium price for the house + land, then this might not be the option for you. Demolishing the house will reset your asset value to land only…. while your mortgage remains unchanged. If you plan on making this your forever home, this might not matter, you’ll have time for the financial balancing act to shift back into your favour. But if you’re thinking this is only the ‘next 10 years’ home, then this might not be the wisest financial decision for you.

You’ll need to rent (and possibly for longer than you think)

Some council’s will require the demolition of the existing house to take place before they will issue the final approvals on the new build. This will add demolition + final approvals + the wait for your builder to start construction to your overall timeline. So it’s important to plan for a slightly longer period of renting than you may have expected… (and we all know why living onsite isn’t really an option right? 😉)

Added upfront costs

You will need to factor into your budget the cost of demolition of the existing house (and possibly some hard landscaping too), which can make the cost of initial site preparation and earthworks higher than what they would be if you were starting with a clean slate.

BUT - you ARE building brand new

A brand new house, built to modern standards, energy efficient and designed for exactly the way you like to live. You can rest easy knowing that ongoing maintenance is lower, the house that you end up with will be more comfortable to live in and perfectly suited to you and your family.

You get to design it YOUR way

Apart from any restrictions set by the block (land size and shape) you get to design the brand new home exactly as you want. Full control over layout, light, finishes and flow. There are way less unknowns and that price can be locked down early, meaning fewer surprises.

For both options:

Check local restrictions early

Heritage overlays or council zoning might ultimately dictate what you can and can’t do anyway. So it’s important to investigate these aspects early before you get too emotionally invested in one option.

Take stock of the value of what you already own

It’s also worth looking at the value of the original house. If it’s a historical heritage home or a high quality custom build, then it would be wise to retain as much of the home as possible, including its beautiful original features; but if it’s a 90’s brown brick home, there’s probably not a lot that you’ll need to retain….

So… which path is right for you?

In an ideal world you would be able to weigh all of this up prior to purchasing a home versus land - but the reality is, often this question doesn’t arise until you’ve been living in the home for several years and your needs change.

While there’s no one-size-fits-all answer here - there definitely is a right answer for you.

If your gut is telling you that this is going to be your forever home and you want complete customisation, peace of mind, and that perfect family function and flow - then a KDRB might be the way to go.

If you’re emotionally attached to the original home, not sure that you want to stay put ‘forever’ or don’t want to completely max out your spend, then a renovation tailored to your budget might be the best way forward.

Whichever path you choose, make sure it’s an informed decision for your family, your home, your financial situation and your local area before you get things underway. And definitely don’t base your decision on what Freddy from Facebook told you to do! 🙂

Where to from here?

If you’re still feeling stuck in your decision making, we’re here to help you get crystal clear. You might find the following blogs useful to understand the next steps in the process:

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Thanks for stopping by!

Until next time,

Susie x

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Susie Martin