Knock down and rebuild PPoR?

Periodically the husband and I have discussions around renovating vs moving. His argument is that we're not going to be here forever, and that we could buy (or build) a house which is much more functional for our needs. I tend to be more along the lines of, let's just dress this up and then sell it. At this point the word 'over-capitalising' tends to enter the conversation.

We were talking about this again today, and I had a revolutionary idea :p
One of the main reasons why we don't get very far with these discussions is because we both really like the area we're in. We're in a great little suburb which is really well located, with houses built in the 1990s all around us. Because it's not a new estate, it feels nice and homey and 'lived in', and there are lots of young families around, which gives it a great feel. Even just little things, like all the properties have a decent set back from the road, so they all feel that little bit bigger.

So, my idea was, why don't we just knock over the current house and build a new one, with the things we want? It would be in about 5 years' time, but obviously it would need a certain amount of planning to happen between now and then.

If anyone has any tips, advice, or recommendations for either an architect or building companies to go through, I would be most appreciative. Horror stories (and good stories!) are also welcome :D
Have some equity available since the lenders will want their loan covered by the bare land value

Speak to your banker or broker before attempting this at home :)


Is it an option instead to do an extension to the house?

It seems like it could be a pretty big inconvenience to actually do a knockdown and build from scratch (although obviously it has some advantages too).
There is quite a lot of this going on in our suburb. Mainly in the older 70s/80s section but I can see the appeal for the other sections too.

If your house is getting to the stage where it's not much more than land value - around $1000 p/m2 is fair for the area then it really can be a win.

You don't have selling fees, you don't have stamp duty and you get to stay in the area. Renovating all kitchens and bathrooms can be a significant cost that would pay a lot of a new house with everything new.

I know you aren't old but it's an excellent location to grow old in too.
it's only 20 years old, barely half way through its life. It would still be more economical to refurbish than to bulldoze.

Do your calcs. Temp relocation costs for 6-9 months @ $750/wk
Demo & development costs
interest on new borrowings (not deductible).

Vs minor inconvenience of the refurb.

Compare the end market value of each option. .