How much does it cost to knock down and rebuild a house?

ALASDAIR DUNCAN
A knock down rebuild can be an opportunity to get into the home you’ve always wanted. Here, we break down some potential costs and savings, and consider some of the pros and cons of this method relative to renovation.

Say you’ve just bought a block of land in an area that you love, but the current house on it just isn’t up to scratch. Alternatively, say your current house is already in an area that you love, but you’re feeling like you’ve started to outgrow the old place, and it’s time to refresh the design and layout, and perhaps take more advantage of space you have on the block.

While a renovation might be one option, a knock down rebuild can be an opportunity to create a totally new home more suited to your current needs. If you’re giving some thought to knocking a home down and building again from the ground up, it’s important to get a picture of the costs you might face.

What is a knock down rebuild?

A knock down rebuild involves demolishing one house in order to completely build a new one in its place. Typically, the demolition process will involve completely levelling a block, and getting rid of all structures on it, as well as things that may be underground. The vacant land is then used to build a completely new house from the ground up.

How much does it cost to demolish a house?

Managing Director of Ownit Homes, Brad Ganim, told Canstar that the cost of a demolition can range from $20,000 to $40,000. There are various things that can both add to the price and help you save money, depending on the block itself, the material that the house is built from, and various other factors we discuss in more detail below.

What can add to the cost of demolishing a house?

While a demolition quote will typically address requirements such as council demolition approvals, capping off utilities like gas and water, and soil testing and surveying, there are additional factors that can drive the price up. These can include access to the block itself, and the cost of removing tree roots and pipes, plus hidden nasties such as asbestos.

Access to the block

Mr Ganim told Canstar that access to the block, or lack thereof, can be a contributing factor in driving up demolition costs. “If the house is on a main road and street parking is not very good, or if you’re on a very narrow block and they can’t get in there, that will make it a lot more difficult.” This is one factor that could make a demolition more expensive.

Things lurking below ground

Mr Ganim also said that when it comes to demolition, it’s just as important to know what’s underneath a block as it is what’s on top. “If there are old pipes, for example, we need to know because there are costs that come into it with replacing those kinds of things.”

He said that there can be a lot of other things underground, such as old footings and tree roots and the like, that need to be removed before a rebuild, and this can add to the cost.

Asbestos

The presence of asbestos in the house can also add up to $10,000 to demolition costs, builder Jason Thistlethwait told Canstar. Mr Thistlethwait, who is the owner of Stroud Homes and has three decades of experience as a builder, said that asbestos is one of the main factors that can add to the cost of demolishing a home.

“You need to get licensed asbestos removalists in [to get rid of it],” Mr Thistlethwait said. “They wear suits, they come in and take it away and wrap it up in plastic.”

Asbestos was a common construction material in Australia from the 1940s through to the 1980s, and was often used in homes for fireproofing or insulation purposes. There are two main types of asbestos you might find in a home – bonded asbestos, which has been bonded to interior or exterior cladding, and friable asbestos, which is loose. There is a chance that either of these may be present in homes built before 1990.

HiPages estimates that the removal of external cladding with asbestos can cost between $4,000 and $5,000, while the cost of removing internal cladding with asbestos from a single room can be between $1,000 and $1,500. HiPages estimates that the cost to remove a roof with asbestos can be between $3,500 and $5,000. Prices will vary depending on how much asbestos is in your house or on your property, and where it is situated.

What are some ways you can save money on a demolition?

Mr Ganim told Canstar that you might be able to save some money on a demolition by recycling materials from your old home. He said that materials such as timber and red terracotta roof tiles can be worth money, and that if a demolition crew picks and resells these things, the benefit can be passed on to the owner.

He added, however, that this is not the case with all materials. He said that brick, for example, is less likely to be recyclable than other kinds of materials, and that while some companies will remove and resell bricks, a brick dwelling will typically just be demolished.

He said that another way to save on demolition costs is to sell the existing structure to a house remover. “That’s a way of saving a lot of money,” he said. “Sometimes they’ll take the house for no charge ‒ you get no money, but they get the house for free.”

While house removal services commonly deal in old timber dwellings such as Queenslanders, Colonial and Post War-style homes, others from more recent periods may also be moved, as long as they are built on platform timber floors. Although it is possible to move concrete slab homes, it is more costly, so if you are curious about this as an option, it would be wise to make enquiries with individual home removers in your area.

What does it cost to build a new home?

It’s difficult to accurately estimate the cost of building a new home, although Mr Ganim told Canstar that $500,000 may be a ‘ballpark’ figure. This is dependent on the types of finishes and fixtures you choose. “You can go up to between $600,000 to $700,000, but around that $500,000 [mark] will get you into a nice home,” he said.

It is worth keeping in mind, though that this is just an estimate, and it is difficult to accurately predict the cost of building a new house. This is simply because the price of a home is dependent on a variety of factors, such as the size, materials and design of the house itself, as well as the fittings, fixtures and decor you choose.

Different companies will offer different package deals for one- and two-storey houses, and if you are planning a knock down rebuild, you may choose to work with an independent architect to design and build a bespoke home for you.

Ultimately, the cost of building a home is dependent on your needs, tastes and budget.

What are the pros and cons of a knock down rebuild over a renovation?

Rebuilding a home can have a number of advantages over renovating ‒ it can give you a clean slate and the ability to design a new home how you want it, as well as potentially having a quicker turnaround time than a renovation. You will also be able to build a home with new materials, and take advantage of structural warranties. Of course, there are also some disadvantages ‒ you’ll need somewhere to live while the renovations are being carried out, and you’ll need to be careful you don’t contravene local zoning regulations or heritage listing requirements.

What are the pros of choosing a knock down rebuild?

A clean slate

While a renovation can enable retaining the essence and character of your home and keeping certain key features, a knock down rebuild brings the advantage of starting from  a clean slate. This method can give you a say in the design of your home from start to finish, allowing greater control of the layout, style, colour scheme and aesthetic.

A knock down rebuild can mean that you will not need to accommodate or work around any issues with the existing structure, such as an inconveniently placed retaining wall or a lack of floor space. However, you will be limited by the size of your block and zoning regulations.

A quicker turnaround

Renovations can take time, and Mr Ganim told Canstar that another advantage of a knock down rebuild is that you can get it over and done with in one go. “You’re never really finished with a renovation,” he said. “You might finish one area, but then you might think, I haven’t done the plumbing in that area, or I want to do some extension plumbing, or I want to put an outdoor kitchen in …”

If you would prefer to budget for one renovation job at a time, and space them out over a number of years, doing a kitchen here and a bathroom there, then you may find that renovating is the more suitable option for you. If, on the other hand, you want an all-new house to move into quickly, and are in a position to spend the money for a knock down rebuild, then this could be the preferable option for you.

New materials

Mr Ganim told Canstar that, in his view, the main advantage of a knock down rebuild is that you can get all your materials new. “You’re not dealing with old material that has sustained damage or deterioration over time, such as old rotted timber bearers or floorboards, old electrical cabling and appliances, plumbing and so on,” he said. Old houses have old house problems, and new materials may not require the same level of maintenance that old ones do.

It is worth keeping in mind, however, that the quality of a new build is also dependent on the quality of the materials. Before signing a contract, it may be advisable to ask your builder where they source their materials and if they comply with Australian standards, as well as any potential delays to supply that may come about as a result of the ongoing COVID-19 pandemic.

Warranties

Whether you are doing a new build or renovating, there are various statutory warranties that exist to cover you. In every Australian state except for Tasmania, builders are required to take out insurance for work value above a certain dollar amount.

These warranties vary state by state, so depending on where you live, there is more information available from individual government authorities in the Australian Capital Territory, New South Wales, the Northern Territory, Queensland, South Australia, Victoria and Western Australia.

One advantage of a new build is that, in addition to the statutory warranties mentioned above, some builders will also offer an additional structural warranty for new homes. Depending on your builder, these warranties can cover you in the event of structural defects in your home for up to five decades.

What are the cons of choosing a knock down rebuild?

You’ll need somewhere to live during the build

One disadvantage of a knock down rebuild is that you’ll need somewhere to live after knocking your house down, meaning you’ll need a separate living budget. You may be living in a separate house and paying rent or a mortgage as you wait for your new house to be built, or you may even be sleeping in a caravan on site as you wait for the work to be finished ‒ anyone who’s seen an episode of Grand Designs can tell you this gets a bit chilly in the winter months.

If you’re planning a knock down rebuild, you’ll need to make sure you’ve budgeted for the time you’ll be living away from the house, including possible costs of storing your possessions and furniture, and make sure there are allowances in this budget for the build to run over time. You will also want to consider ensuring your home and contents insurance is up to date, based on where you (and your possessions) are during this time.

Cost

As mentioned above, an advantage of a knock down rebuild over a renovation is that you get the whole job done at once, rather than in increments. The flipside of this is that you will be required to pay for the whole job within a relatively short period of time. If you choose to renovate one area of your house at a time, your costs may be spread out over a longer period, requiring smaller cash spends or loans progressively. Depending on your style of budgeting, this may be preferable to a knock down rebuild, which can leave you with a large loan and personal debt to pay off.

Local zoning laws

Another potential drawback of a knock down rebuild is that you must be particularly wary of council regulations and zoning laws in the planning stage. If the property you’re looking to demolish is subject to any heritage requirements, then you may not get permission to knock it down. You can face major fines, as well as wider consequences, for knocking down heritage-listed properties without permission.  Before any kind of knock down rebuild, it is worth checking local zoning laws to make sure you will not run afoul of any restrictions.

If you’re weighing up your options for your next house, Canstar can help you compare home loans, and you can also check out our comprehensive guide to the various types of home loans that are available to suit your particular needs and requirements. You may also be interested in visiting our Renovation Hub.

 

Cover image source: Bubbers BB/Shutter