More of our clients are deciding not to move. With construction costs where they are, the smartest project is often the house you already own.
A few years ago, a typical first conversation started with a vacant block or a knock-down. Today it more often starts at the client's own kitchen table, with a simple question: can we make this house work for the next twenty years? Increasingly, the answer is yes, and the numbers back it up.
Extending costs half to three-quarters of building new
On the projects we are seeing, a well-planned extension typically lands at around 50–75% of the cost of a comparable knock-down rebuild.
That might sound at odds with what we wrote back in 2021, when we noted that new rooms can cost more per square metre than a new build. Both things are true. The rate for new space is higher, but you build far less of it. The savings come from everything you don't have to do:
No / less demolition and reduced site costs, tip fees or temporary fencing for a full rebuild.
Existing bedrooms, bathrooms and laundry stay. Often they need only a refresh, not a rebuild.
Services and slab are already there. Connections, driveway, crossover and landscaping can largely be kept.
No moving costs. Selling and buying elsewhere means agent fees, transfer duty and removalists, often tens of thousands before a single brick is laid.
Shorter approvals and programme. Less building means less time paying rent elsewhere, or no need to move out at all on some projects
Extension to a 1920’s Subiaco cottage allowed the creation of a new entry directly into the new addition.
Your home is one of the few tax-free ways to build wealth
In Australia, your main residence is generally exempt from capital gains tax. Any value you add to it through good design, you keep.
Compare that with most other investments. Gains on shares or an investment property are taxed when you sell. Gains on the home you live in, in most cases, are not. Money spent improving it isn't tax deductible, but the uplift in value it creates is generally yours, tax-free.
There are other benefits too:
You avoid transfer duty. Staying put means you don't pay stamp duty on a new purchase, which on a typical Perth family home is a significant five-figure sum.
You invest in an asset you use every day. Unlike a portfolio, a better kitchen or a warmer winter living room pays a daily dividend in comfort.
Running costs drop. Upgrading insulation, glazing and airtightness as part of the works lowers energy bills for as long as you live there.
This is general information only, not tax or financial advice. Speak to your accountant about your own circumstances.
Where you live matters
How far a major upgrade pays off depends a lot on your suburb. In premium Perth suburbs with median values around $1.5m, the cost of a significant extension or upgrade is usually easy to justify, because the finished home sits comfortably within what the market will pay. In suburbs with medians of $2m and above, we have seen owners gain considerably more in equity than the project cost them. In more affordable areas the maths is tighter, and it pays to design to what the street will support rather than overcapitalise.
The new living, kitchen and master suite
The most common brief on our desk right now is a new living area, kitchen and master suite added to an existing home.
It makes sense. These are the rooms that date fastest and matter most. Older homes in Perth often have a small, closed kitchen facing the street, living rooms cut off from the garden, and a main bedroom no bigger than the kids' rooms. The secondary bedrooms, bathroom and laundry usually work well enough.
So rather than replace the whole house, we add a new wing that does the heavy lifting:
Open kitchen, dining and living oriented north, opening onto the garden.
A master suite with its own ensuite and robe, often separated from the kids' zone for privacy.
The original house becomes the bedroom wing, refreshed and, where practical, upgraded for comfort.
The result feels like a new home, at a fraction of the cost and disruption.
Build the new part to a higher standard
An extension is the perfect chance to build the most-used rooms to Passive House principles, even if the rest of the house isn't.
The new wing is where you spend most of your waking hours, so it is where performance matters most. We design new additions with continuous insulation, high-performance glazing, careful airtightness and good orientation. The living spaces stay comfortable year-round with very little heating or cooling.
The junction between old and new needs care. Done well, the new wing can be zoned so it performs on its own terms, while the original house is upgraded where it is cost-effective: ceiling insulation, draught sealing and better windows in the worst-performing rooms.
Subiaco Extension
Extend, renovate or rebuild?
Staying put doesn't always mean extending. Sometimes the right investment in your own home is a rebuild on the same land.
In our earlier article, Renovation or New Build? Things to consider, we set out the questions that decide it. They still hold:
Is the existing house sound? Good orientation, a workable layout and solid construction favour extending.
How much of the house needs to change? If the brief touches every room, a rebuild may be simpler and more predictable to price.
What is the structure worth? A valuation that separates land from building shows whether there is real value to keep.
How important is performance? Full Passive House certification is far easier in new construction than in an existing home.
How long do you have? An extension usually needs fewer approvals and less time on site.
If the bones are good and most rooms still work, extending is usually the clear winner.
Thinking of staying put?
The best place to start is a feasibility study on the house you already have.
We'll look at your existing home, your brief and your budget, and tell you plainly whether extending, renovating or rebuilding gives you the best return. Get in touch to book a consultation.
