Thinking about Renovating or Building? #

Your First Steps to Your Dream Home #

You are about to embark on a long journey. We were in your shoes. The most important thing is to know what you need (the minimum baseline), want (your wishlist) and how much you can afford.

Renovate or Build, Knock down Rebuild? Weighing Your Options #

Key Considerations for NSW Homeowners #

Pros of Renovating:

• Lower upfront costs: Retain existing structures (e.g., foundations, walls).
• Faster approval: Minor works may only need a Complying Development Certificate (CDC).
• Preserving Character: You can retain the original charm and character of an older home while updating it.
• Staged Approach: Renovations can often be done in stages, allowing you to spread out the costs over time.

Cons of Renovating:

• Hidden surprises: Unforeseen problems including asbestos, wiring issues, or structural defects can increase costs.
• Integration and Design limitations: You’re often working within the existing structure, which can limit design possibilities. Difficult to reconfigure layouts or meet modern energy standards (BASIX). Blending new features seamlessly with older parts of the house can be tricky.
• Limited Energy Efficiency Improvements: Achieving the same level of energy efficiency as a new build through renovation can be challenging and costly.

Pros of Build, Knock down Rebuild:

• A Truly New Home: You get a completely modern home designed to your exact specifications, layout, and lifestyle needs. Forget compromising on floor plans or living with outdated features.
• Improved Energy Efficiency: New builds adhere to current building codes, meaning better insulation, energy-efficient appliances, and potentially lower utility bills – a significant advantage in the NSW climate.
• Reduced Future Maintenance: With everything being brand new, you’ll likely have fewer maintenance headaches in the initial years compared to an older, renovated home.
• Increased Property Value: A modern, well-designed new home can significantly boost your property’s market value, particularly appealing for investors in the competitive Sydney market.
• Design Flexibility: You have a blank canvas to create the home you’ve always envisioned, tailoring it to your family’s needs now and in the future.
• Custom design: Maximise space on smaller blocks (common in small pockets of Sydney).
• Future-proofing: Meet NSW bushfire (BAL ratings) and flood standards upfront.
• For investors - higher ROI: Modern duplexes in areas like Ryde or Parramatta attract premium rents.

Cons of Build, Knock down Rebuild:

• Disruption, Longer timeline: 12–24 months for planning, DA approval (faster with CDC approval) , and construction.
• Higher costs: Demolition, site preparation, and council contributions.
• Council Approvals: Navigating the development application (DA) process with your local council is essential and can take time and effort. (Although if CDC is available, the approval is relatively fast)
• Loss of Existing Features: If your current home has unique architectural details or sentimental value, these will be lost in a rebuild.
• Potential for Unexpected Issues: Even with thorough planning, unforeseen issues during demolition or construction can arise, potentially impacting timelines and budgets.

NSW-Specific Challenges and Considerations #

Bushfire, flood zones and heritage rules can significantly impact the cost of renovations or building a house on your property.

Bushfire Zones #

• Check your property’s Bushfire Attack Level (BAL) Bushfire zones (BAL 12.5–40): Rebuilds in some areas require flame-resistant materials.
• Understand additional construction requirements
• Potential increased building costs (up to 30% more)

Floodplain Management #

• Review local flood planning maps - these are typically available from the council website. For example known floodplains like the Hawkesbury-Nepean Valley properties face strict floor-height rules.
• Understand floor height restrictions
• Potential requirement for elevated construction,

Heritage Restrictions #

• Check local heritage conservation areas
• Obtain heritage impact statements
• Understand demolition and reconstruction limitations

Other considerations #

• Tree preservation orders
• Sydney water easement

Crunching the Numbers: Budgeting for Your Project #

Sydney’s cost realities – from demolition to driveway

Average Costs in NSW (2024 Estimates) #

These are rough cost estimates for a building project. You should do your own due diligence for your specific project.

• Demolition: The cost to demolish your existing home can range from $25,000 to $50,000+ depending on the size and complexity of the structure, as well as the presence of hazardous materials.
• Asbestos Removal: If your existing home was built before the mid-1980s, it’s highly likely to contain asbestos. Safe removal by licensed professionals can add $5,000 to $20,000+ to your demolition costs, sometimes even more for larger properties.
• Site Preparation: This can include clearing the block, levelling the land, excavation for foundations, and retaining walls if your block is sloping. Costs can vary significantly based on the site. Allow $5,000 to $30,000+.
• Council Fees and Charges: Development application (DA) fees, construction certificates, inspection fees, and contributions to local infrastructure can add a significant amount. Budget $10,000 to $30,000+, but this can be higher depending on the council and the scale of your project. Look into CDC to see if that pathway can be utilised over a DA.
• Utility Disconnections and Reconnections: You’ll need to pay to disconnect existing services (electricity, gas, water) and reconnect them to your new home. Allow $2,000 to $5,000+.
• Temporary Accommodation: The cost of renting or finding alternative living arrangements during the build can be substantial. Factor in several months of rent, moving costs, and potential storage fees.
• Landscaping: Don’t forget the costs of landscaping your new garden, including soil, plants, paving, and potentially irrigation systems.
• Window Coverings and Light Fittings: These are often not included in the base build price and can add a significant amount depending on your choices.
• Contingency Fund: It’s absolutely essential to have a contingency fund of at least 10-15% of your total budget to cover unexpected issues or changes during the build.

Hidden Costs to Factor In #

• Asbestos removal: $5,000–$15,000 (common in pre-1990 homes).
• Council contributions: Up to 3% of project value (e.g., $15k on a $500k build). CDC fees if not going the DA route.
• Site costs: Retaining walls ($10k–$30k) for sloped blocks. Soil testing: $500 - $2,000. Excavation and levelling: $10,000 - $50,000. Utility connections: $5,000 - $20,000

Checklist: Are You Ready to Build? #

Financial Readiness Assessment #

1. Have you thoroughly assessed your financial capacity and determined a realistic budget?
2. Have you secured financing? Contact a mortgage broker or a bank to assess your budget.
3. Do you have a buffer for unexpected costs? Have you factored in all potential costs, including hidden expenses and a contingency fund?
4. Have you compared construction loans?

Project Timeline Considerations #

1. Are you prepared for a 9-12 month project?
2. Have you arranged temporary accommodation?
3. Can you manage potential project delays?

Personal and Lifestyle Goals #

1. Does the proposed design meet your long-term needs?
2. Have you considered future resale value?
3. Are you emotionally prepared for the building process?

Action Steps #

• Create a budget and understand your numbers of what you can afford
• Contact a mortgage broker or a bank to assess your budget.
• Research local council regulations
• Consult with multiple builders, volume builders and custom builders and get some early ballpark numbers
• Develop detailed project brief, consider future needs if this is a 10+ year home.