What a Knock-Down Rebuild Really Costs

Why there is no single number

A knock-down rebuild is two projects run back to back: clearing the old house, then building a new one. The cost of each depends on things that differ from block to block — the house that is there now, the ground under it, the house you want, and the rules that apply to the land.

That is why the useful question is not "how much?" but "what are all the things I am paying for?" A budget built from the list below will be far closer to the final figure than any headline number.

1. Before you commit: feasibility

These are small costs that prevent large ones. Spend them before you sign a building contract.

• Planning certificate from council, which sets out zoning, heritage status, bushfire and flood affectation and other controls. It decides what you can build and how it gets approved.
• Survey — a detail and contour survey showing levels, boundaries, trees, services and neighbouring structures.
• Soil or geotechnical report. Reactive clay, fill or rock changes the footing design, and the footing design changes the price.
• Sewer and stormwater information — where the mains are, and whether the new house will be built near or over them.
• An early demolition inspection, including whether asbestos is likely. On older houses, asbestos can be one of the largest demolition lines.

2. Design and approval

• Design and drafting. Included in many volume builders' packages; a separate fee with an architect or designer.
• Energy and sustainability assessment. Required for new homes in most places. In NSW this is the BASIX certificate.
• Engineering — structural, and sometimes hydraulic or civil for stormwater.
• Approval fees. Complying development through a private certifier, or a development application to council, each with its own fees. Some councils also charge development contributions.
• Arborist and other reports where trees, heritage, bushfire or flooding are involved.
• Levies and insurance that apply to building work in your state. Your builder or certifier will list the ones that apply.

3. Demolition

The demolition is a short part of the timeline but carries more variables than people expect.

• The house itself — driven by construction (fibro, weatherboard, brick veneer or double brick), size, storeys and access.
• Slab, footings, paths and driveway. Your builder will usually want most of it gone. Confirm exactly what is included.
• Asbestos — survey, removal by a licensed asbestos removalist, and clearance before demolition starts.
• Service disconnections — electricity, gas, water and sewer, each arranged through a different party, some with their own fees and lead times.
• Trees — removal only with the right approval, plus protection fencing for trees that stay.
• Outbuildings, pools and retaining walls, which are often priced separately.
• Waste disposal, which is frequently the largest single part of the demolition price.

4. Site costs

Site costs are where knock-down rebuild budgets most often go wrong, because they depend on ground conditions that are not visible until someone investigates.

• Slope. Cut-and-fill, extra excavation and retaining walls on sloping blocks.
• Rock. Sandstone and other rock close to the surface can mean hammering or sawing.
• Footings. Reactive soil, fill or a sloping site can call for deeper or engineered footings, piers or a stiffer slab.
• Access. Narrow frontages and steep driveways slow deliveries and may need smaller machines.
• Stormwater and sewer. New connections, on-site detention where council requires it, and any work to build near a sewer main.
• Bushfire construction requirements if the block is in a bushfire-prone area.

Many builders give an allowance for site costs until the soil test and survey are in. Ask how the allowance was calculated, and what happens if the real figure is higher.

5. The build contract

The builder's contract is usually the largest single cost. When comparing contracts, look past the base price.

• Inclusions. What is standard and what is an upgrade — ceiling heights, cabinetry, flooring, benchtops, fixtures and appliances.
• Provisional sums and prime cost items. These are allowances, not fixed prices. If the allowance is low, you pay the difference.
• Exclusions. Anything not listed is not included. Read the list line by line.
• Variations. How changes after signing are priced, and what the contract says about cost increases.

6. Outside the contract

These are the items that turn a finished house into a home you can move into, and they are often left out of the builder's price.

• Driveway and paths.
• Landscaping, turf and retaining.
• Boundary fencing and gates.
• Window coverings.
• Letterbox, clothesline and outdoor lighting.
• Air conditioning, if not included.
• Floor coverings in some packages.

7. Living costs during the project

• Somewhere to live from the week before disconnections until handover of the new house. Plan for delays, not just the builder's estimated build time.
• Removals and storage at both ends.
• Finance costs. Construction loans are drawn down in stages, so interest grows as the build progresses. Your lender can explain how progress payments work.
• Insurance for the vacant block and the construction period, as required by your lender and your contract.

What you do not pay

A fair comparison with buying elsewhere also counts what a knock-down rebuild avoids: stamp duty and agent fees on a purchase and sale, and the cost of leaving a location you already like. For many owners, that is the reason the numbers work.

Keeping the budget honest

• Investigate early. Survey, soil test and a demolition inspection before signing a building contract.
• Get the demolition quoted on scope, not a total. Slab, footings, driveway, asbestos, disconnections and disposal should each be visible.
• Keep a contingency. Site costs, delays and variations are common enough that a buffer is not optional.
• Line up the timing. Demolition should finish when the builder needs the site, not weeks earlier while you are paying rent.

If you're in Sydney, we can inspect the house, confirm what your builder needs removed and quote the demolition as a fixed, itemised price.

Where to go next

• Knock down rebuild site prep — how the demolition is sequenced to your builder's start date.
• House demolition — what is involved in taking the existing house down.
• Demolition cost guide — rough bands for the demolition part of the budget, and why an on-site quote is needed for a real price.