Extensions vs New Homes vs Relocation.
What Is The Better Option?
When there is a change in the demands or the dynamic of the home, then a choice is presented to the homeowners: extend and renovate, move or knockdown and start afresh. All options can be an appropriate choice in different circumstances that will depend on need and desired outcome.
In Sydney Brisbane and Melbourne, extensions are popular as there are many older houses that are ripe for renovation and extension by either adding more levels or spreading out where space allows. Investing in the existing home is the most cost effective option and will add value while improving quality of life. While making your choice and investigating options, consider the following factors:
- How long do you plan to live in the home?
- Are you connected to the local area? Schools/work/friends/family?
- Does the home need modernising?
- Is the family growing?
- Would you like a better lifestyle?
Options in Melbourne: Extensions Vs Buy/Sell Vs Knock-Down Rebuild
Extension / Renovation
|Preparing house for sale||–||$15,000||–|
|Carpets & drapes||$10,000||–||$20,000|
|Cost difference of bigger house ^||–||$510,000||–|
* based on an $1,900,000 home in Victoria. ** based on 12months at $800p/w *** costs are indicative ONLY and will vary for individual circumstance. ^ cost difference between 3 bedroom and 4 bedroom house Surrey Hills 3127
Disclaimer: While every effort has been made to ensure the accuracy of the figures shown in this table, the results should be used as an indication only. Before relying on this material for any important matter, users should carefully evaluate its accuracy, currency, completeness and relevance to their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
Extend and Renovate
For those who enjoy where they live and have no desire to move to other parts of Sydney, Brisbane or Melbourne, home extensions and renovations is the best choice. Older properties have a sense of character and were built to last (which are plentiful within inner city and midtown areas in London), so extensions can restore and maintain the ornate and beautiful charm of classic exterior architecture while modernity and convenience enhance the interior. Older houses, with or without extensions, hold their value better than new houses and are difficult to replicate using modern building techniques. Sydney, Brisbane and Melbourne extensions are often a faster alternative to building new and are typically the most cost efficient option.
Some homeowners decide that the best thing to do is to sell and buy an existing house. This option is attractive if you don’t like the area you live in. Often though, movers don’t calculate the true cost of moving. With stamp duty, sales and relocation implications, moving can be an expensive alternative. Often costs are not realised until it’s too late.
These expenses are costs, never to be recovered. They can mount to almost double the cost of renovating the existing home and savvy home owners are discovering that in many instances the best option is to invest into their existing home, therefore enjoying both financial and lifestyle gains.
There is also the cost of upgrading to a bigger home. On 19 July 2018, Realestate.com.au, reported that the difference between a 3 bedroom home and a 4 bedroom home in Surrey Hills Victoria (3127) was $510,000. With the inclusion of stamp duty and agents fees, that cost can blow out to more than $650,000 for just one room.
Knockdown and Rebuild
Sometimes homeowners consider knocking down and rebuilding. Unfortunately though, new homes are only ever brand new the day they are finished. From that day on the new home can continue to lose much of its value, year after year, for up to five to ten years thereafter. This is due to housing styles going in and out of fashion, depreciation, as well as the unavoidable difference between cheap, modern materials and durable, long-lasting older home construction.
Knocking down and building new is also a very expensive option. There is the additional demolition, landscaping, rent and moving cost. Not to mention the cost of building an entire home from scratch.
It is important to always decide the best choice for your current and future lifestyle in mind. Know the space you live in before making big decisions about changing or leaving it, do plenty of research into all the options before deciding. Knowledge is the best way to make the right decision whether to extend and renovate, move or knockdown and rebuild.
When the existing home no longer fits, home owners generally have three options to choose from. They can either sell up and find a more suitable home, knock down the existing and start again, or, renovate the existing home to better suit their current needs.
One of the main factors when considering each option, is price. Significant items such as stamp duty, agent fees and moving costs can add hundreds of thousands when considering buying and selling. In addition is the cost difference from smaller homes to larger homes when upgrading. There is almost half a million difference between a 3 and a 4 bedroom home when considering suburbs similar to Surrey Hills in Melbourne’s east.
And knock down rebuilds have additional sunk costs including moving in and out (that’s twice) landscaping, driveways, and new service connections. And then there’s the cost of an entire new home build. A double storey 4 bedroom custom home can start from 8 hundred thousand and its not surprising for them to exceed a million depending on size.
The third option is extending and renovating. Sure, there are constraints when considering design, but a skilled building designer from a reputable building company will be able to over come these and create value add. And existing homes were built to last. With hardwood frames and solid timber beams, homes built in the past were built in an era before nail guns and power saws. They were built by craftsman who measured twice and cut once. And without doubt the biggest advantage is the cost saving. A comparable extension and renovation can save more than half the cost when comparing to real estate options and up to three times when considering a knock down rebuild.
In this comparison, extending and renovating is the winner.