Building A New Home Vs Extending Your Existing Home

by Ryan Stannard | February 6, 2021


Are you shocked by just how expensive it is to extend your home? 

With high exposure to hidden surprises and unexpected variations, you could be at risk of spending even more on your extension. And by blowing your budget or having to make sacrifices, your extension could fall short of what you had intended in the first place. 

Whilst the two seem poles apart, often the cost of a completed extension is actually very similar to building a brand-new home. But when you decide to build new, you get the added benefit of a home that suits your lifestyle, with improved living comfort through modern construction methods.

Rebuilding the place you call ‘home’, will also allow you to increase your equity far more than an extension would provide.

Don’t Let Your Home Become An Eye Sore

According to Domain, an 80-square-metre ground-floor extension can cost anywhere between $164,526 to $310,896. So the cost difference is already minimal when you compare it to a new build. 

Building A New Home Vs Extending Your Existing HomeDue to the perceived cost-benefit of the initial quote, you may be tempted to progress with the extension and possibly look at how costs can be saved. However, what tends to happen in these instances is that the extension is built to a substandard level and ends up looking tacked onto the existing building, rather than looking like it has always been there. 

Given the age of the property, money is quickly eaten up with additional charges as the extension runs into hidden surprises and variations. Whereas by taking a more holistic approach, considering the minimal difference in costs, improved living standards and resale benefits, a new build doesn’t seem such a drastic decision to make.

By choosing to build new, you can be confident that you are making a commercial decision based on a fixed price and certainty of the build. We’ve all seen those homes that have had an extension, with the new living space sticking out like a sore thumb – it never looks good.  As you can imagine, this does very little for increasing the equity in your home, so it’s a real compromised opportunity which means you could miss out financially.

Some people choose to go down this route as they believe an extension is the cheapest option. Whether it’s just a room at the back of the house or larger bedrooms; these still require a considerable amount of labour and materials to design and build. So it would be wrong to dismiss the option of building new, without researching the costs first. 

Here are some tips that may help you decide whether you should extend or start with a new home.

The Cost Isn’t All That Different

First of all, it’s important to know that based on a $300k extension, it may only cost as little as 15% more to build new. Starting with a blank canvas would also help with regard to layout, design and room placement. Even fixtures & fittings, as everything would be brand new.

A lot of extensions run into restrictions, due to their surroundings and are more likely to run into hidden surprises and variations. Therefore, costs tend to balloon once the project has begun. However, when you work with a professional builder on your new home, they will provide fixed price agreements, so you can guarantee the price you will be paying.

Clarify What You Need From Your Home

The next thing to do is look at the big picture and identify what you need in your home.

Changes in the home, are often caused by additions in the family, or relatives moving in or just generally needing more space. However, if you compromise what you want to fit into your existing house and simply bolt on an extension to provide more space, you home could end up resembling a patchwork quilt.

Take The Emotion Out & Check The Reality

Finally, you should take the emotion out of the decision and establish whether an extension would achieve what you really need or if a new home would fit your lifestyle better.

Building A New Home Vs Extending Your Existing HomeModern homes are built to a higher standard and designed in such a way that increases living comfort. With better construction methods, homes are built with materials that help keep you cooler in the summer and warm in the winter, whilst also increasing daylight in the rooms. Rooms are generally larger and with open plan living being the norm in new homes, families can interact and entertain much more easily.


With this in mind, it’s important to remember that whilst it may have been the family home, moving away from that attachment and considering the other benefits a new build would bring, could be the best decision you’ll ever make.

To ensure you are kept well informed when you get started on the design process. we’ve put together a free guide for you to download.

Just click on the link below to download our guide with The 7 Things You Must Know Before Designing A New Home.

Download Our Free Guide For Building In Adelaide