Demolish and Build Cost in 2025: What You Need to Know Before Starting

In today’s Australian property market, “knockdown and rebuild” projects are gaining immense popularity. Many homeowners are opting to demolish an existing property and build a new one rather than renovate it. However, one of the biggest questions is: what will be the demolition and build cost in 2025?

Understanding the costs upfront helps you budget smartly, avoid hidden surprises, and make confident decisions. This blog will guide you through the average demolition and build expenses in Australia, including the factors influencing pricing, common FAQs, and expert tips to help keep your project on track and within budget.

The Average Demolish and Build Cost in 2025

In Australia, the cost to demolish and build in 2025 ranges between AU$200,000 and  AU$800,000, depending on the size, design, and location of your project.

• Demolition cost: Typically  AU$20,000 –  AU$50,000 for a standard block in metro areas.

• New build cost: A basic single-storey home may start at around  AU$1,500 –  AU$2,500 per square metre, while a custom luxury build can exceed  AU$3,500 per square metre.

For a standard 3–4 bedroom home, the combined knockdown rebuild cost ranges from  AU$350,000 to  AU$600,000.

Factors That Influence Demolition and Building Costs

1. Site Conditions

Soil quality, slope, and access to the block affect demolition and construction costs. For example, a steep block requires more excavation and the installation of retaining walls.

2. Size and Design

A single-storey project costs less per square metre than a double-storey. Add-ons like alfresco areas, luxury kitchens, or pools can significantly increase costs.

3. Materials and Finishes

Standard inclusions are cost-effective, but premium finishes—such as stone benchtops, timber flooring, and high-end appliances—can significantly increase your budget.

4. Location

Sydney and Melbourne builds often cost more due to demand, labour rates, and council fees. Regional areas may have cheaper land but higher transport costs.

5. Permits and Approvals

Expect to spend  AU$10,000 –  AU$20,000 on council permits, planning approvals, and compliance with demolition and building regulations.

FAQs About Demolish and Build Costs

1. Is demolishing cheaper than renovating?

In many cases, yes. A large-scale renovation can cost between  AU$300,000 and  AU$500,000, but it may still leave you with an older structure. Demolishing allows you to build a brand-new home with modern energy efficiency and layout flexibility.

2. How long does a demolition and build take?

• Demolition: 2–4 weeks (depending on site clearance and approvals).

• New build: 6–12 months for most standard homes.

3. Can I live in the house during demolition and rebuild?

No. You’ll need to arrange temporary accommodation, which can add to your overall budget.

4. Are there hidden costs I should prepare for?

Yes. Some standard extras include:

• Asbestos removal ( AU$5,000 –  AU$15,000)

• Tree removal (AU$1,000 – AU$5,000)

• Utility disconnection fees (AU$1,000 – AU$3,000)

• Unexpected soil or drainage issues (AU$5,000 – AU$20,000)

5. Can I finance a knockdown rebuild with my mortgage?

Yes, most Australian banks offer construction loans or extend your existing mortgage to cover knockdown rebuild projects.

Tips to Manage Demolition and Build Costs

1. Get Multiple Quotes

Always compare at least 3 builders and demolition contractors. This gives you clarity on inclusions and helps you avoid inflated quotes.

2. Choose a Reputable Builder

Select a builder with experience in knockdown rebuilds, not just new builds. They’ll understand the demolition process, council regulations, and cost-saving strategies.

3. Ask for Fixed-Price Contracts

Fixed-price contracts protect you from rising labour and material costs, which are common in Australia’s current construction market.

4. Factor in Temporary Living Costs

Budget for rent or temporary housing during the construction period. This can add  AU$20,000 –  AU$40,000 to your overall cost if the build takes a year.

5. Plan for Sustainability

Building new means you can future-proof your home. Investing in solar panels, insulation, and energy-efficient windows may cost more upfront, but it reduces long-term operating costs.

Real Cost Example: Melbourne Case Study

• Demolition: AU$25,000 (including asbestos removal and site clearance)

• Permits & approvals:  AU$12,000

• New 4-bedroom double-storey home (250 sqm):  AU$550,000

• Temporary housing for 10 months:  AU$25,000

Total:  AU$612,000

This case study illustrates why precise budgeting is essential—hidden expenses, such as temporary housing, can quickly escalate costs.

Why 2025 Is the Right Time to Knockdown and Rebuild

Despite rising construction costs, demolish-and-build projects in 2025 remain a wise investment strategy for Australian homeowners. Demand for new housing, tax benefits, and the ability to create a customized, energy-efficient property mean you can increase both your lifestyle comfort and property value.

According to industry reports, homeowners who undertake a knockdown rebuild often see a value increase of up to 20–30% in their property within a few years, especially in prime suburbs.

Conclusion

The demolition and build cost in 2025 varies widely, but with careful planning, you can control your budget and achieve your dream home. On average, expect to spend between  AU$350,000 and  AU$600,000 for a standard family home, with demolition costs ranging from  AU$20,000 to  AU$50,000.

By understanding the factors that drive costs, preparing for hidden expenses, and working with the right professionals, you can make your knockdown rebuild project both financially savvy and emotionally rewarding.

If you’re considering a fresh start, now is the perfect time to explore your demolition and build options. A new home isn’t just about bricks and mortar—it’s about creating a lifestyle that reflects your needs today and in the future.