I'm currently arranging building insurance for a property I've just exchanged upon and I am surprised at the high estimates the insurers are making for the rebuild cost of the home. Without going into specifics of the actual location, the property is about 10 years old and in very good nick in a suburb of houses of similar age and quality. The purchase price is around $600K, it has 225sqm living space + 35sqm double attached garage, brick veneer, tile roof, ducted heating and cooling and quality light fittings and curtains.
The online estimators that I use put the rebuild cost at $480 - 500K, which is not that far off the entire purchase cost (ie. within $120K). The absolute cheapest nearby blocks of land go for $350K. Now either I got the deal of the century and should have really paid $200K more or what I paid was about right and rebuild costs are much more than build costs due to the demolition costs. The price I paid was certainly within $10K ball park for what has been recently selling, so I'm thinking the latter reason holds true. Do demolition expenses really cost this much ie. $150 - 200K?
The online estimators that I use put the rebuild cost at $480 - 500K, which is not that far off the entire purchase cost (ie. within $120K). The absolute cheapest nearby blocks of land go for $350K. Now either I got the deal of the century and should have really paid $200K more or what I paid was about right and rebuild costs are much more than build costs due to the demolition costs. The price I paid was certainly within $10K ball park for what has been recently selling, so I'm thinking the latter reason holds true. Do demolition expenses really cost this much ie. $150 - 200K?
