With Australians facing the most unaffordable housing market on record,1 extending or renovating an existing property may be the way to go if you’re keen to maximise your living space and create your dream home.
But whether the aim of your house extension is to build a granny flat, accommodate a growing family so you can stay where you love, or modernise your property, careful planning is a vital first step.2
As well as pinning down your home extension goals and decor, there are other practical considerations to factor in before you begin, such as understanding any potential implications for your home insurance. For instance, will your policy cover accidental damage if your contractor drops a beam and leaves a gaping hole in your floor?
Reasons for undertaking a house extension
Many Australians opt for a home renovation, such as an extension, to stay at their current residence longer term.3 A house extension may sometimes boost a property’s value or provide much-needed extra space without the hassle of moving.4
However, before reaching for that hard hat and hammer, let’s drill down to a few common steps in the home extension journey, to help you plan and act with more confidence.
Planning your house extension – where to begin
Whether you’re focusing on your kitchen, your bathroom or a whole new second storey, the process is the same – good planning and clear expectations from the start can help you get the most from your house extension project.2
Define your goals
You might want to begin by asking yourself what you hope to achieve with your extension. Do you want to create more social space for teens? Add extra bedrooms and bathrooms to potentially boost your home’s resale appeal? What are your key priorities?
“The more specific you are about your plans, the smoother the process will be,” says Tony Mitchell, General Manager Building and Licensing Services at Master Builders Queensland.
You could kick off by creating a wish list and then ranking your goals in order of importance. Interior design magazines and websites can be a rich source of inspiration – or you could curate a vision board of dream images to help inspire and motivate you throughout the project.2
Set your budget
Understanding your financial limits before you begin your project could mean less stress down the line. Renovation experts recommend starting with a rough ballpark figure and then refining this as you receive quotes for the items on your wish list.2
How much does a house extension cost? As a rough guide, the average house extension cost in Australia is around $2,000-$4,000 per square metre for a ground floor extension – and you can expect to pay about 50 percent more for a second storey extension.5 Extra costs you might want to account for include council building permits and utility upgrades.5
Seek professional help
To help yield the best results, you’ll want to find the right professionals for the job. Consider asking friends and family for recommendations when choosing an architect, builder or interior designer, and ask to review their portfolios for similar projects. When it comes to quotes, it pays to get more than one, according to Mitchell.
“When shopping around for a licensed builder, we recommend getting at least three quotes,” he says. “The cheapest quote isn’t necessarily the best option, so don’t feel you have to accept the first quote you get.”
“Review and compare each quote you receive, but don’t make your decision off price alone. View previous work from a builder – you might find a folio of work on their website – and speak with past clients if possible. Be sure to choose an experienced builder who you can trust to deliver the level of quality you’re after.”
Check building and council regulations
Depending on the size of your extension and your location, before you start your project you may need to obtain planning and building permits, a demolition permit, or a special permit if your property is on a heritage register.6
Mitchell says that while your builder will likely be responsible for ensuring your renovation complies with building codes, it’s a good idea to understand what building permits may be required by checking with your local building authority, local council and relevant government department in your state or territory.
In Australia, any project that expands the footprint of your home, such as adding a new room or a second storey, will require a permit.6
“A building permit is needed before any construction can begin,” explains Mitchell. “A development application should be lodged and will be assessed by either a private building certifier or your local authority. The building development approval will specify what stages of the construction process require a building inspection.”
Communicate with neighbours
Keeping your neighbours informed about your impending building work is good practice and may help avoid problems during your extension project.
A proactive approach can help prevent disputes down the line but, depending on your location and the size of your project, keeping your neighbours informed may also be required by law.6 For example, in metropolitan areas in New South Wales, a certifier or your local council must inform neighbours within a 20m radius that you have applied for a complying development certificate 14 days before it can be approved.7
Even if you aren’t required by law to inform your neighbours, it makes sense to communicate clearly and openly with them before and during the building process, to address any concerns they might have.
How to avoid common mistakes with your house extension
Any renovation can come with unanticipated costs,8 so it’s generally a good idea to factor in a contingency to cover the unexpected. Other items that may not be included in your quote could include interior and exterior painting and furnishing the extension when complete, so it might pay to capture these key finishes in your initial budget.5
Mitchell says it’s also important to have a contract in place with your builder – even if the project is small.
“Building work valued over $3,300 must legally be covered by a written contract – though it’s a good idea to have a contract regardless of the value of work,” he says.
“Having a written contract in place between you and your builder clearly sets out what you both agree to and helps to prevent disputes throughout the building process.”
Understand the insurance implications of a house extension
A house extension may affect your property’s value and sometimes your insurance.
Mervyn Hartley, Youi’s Head of Product – Home, recommends checking your policy thoroughly before you start any work.
“Before you start the process, read your Product Disclosure Statement so you know what you’re covered for and any limits and exclusions that apply, and don’t forget to notify your insurer if required,” he says. “You want to establish if you’ll remain adequately covered throughout the process”.
Planning a house extension can be an exciting journey, but preparation is key to avoiding pitfalls. By taking the time to plan and partner with the right professionals, you can create a space that meets your needs and enhances your home.
To find out more about how Youi’s Building and Contents insurance might fit your renovation goals, consider starting a quote today.
1 Source: Australian Property Update – Australia faces worst housing affordability crisis in 30 Years, September 2024
2 Source: Three Birds Renovations – 7 essential steps to a home renovation, April 2024
3 Source: Houzz – 2023 AU Houzz & Home Renovation Trends Study, July 2023
4 Source: HiPages – Home extensions
5 Source: HiPages – How Much Do House Extensions Cost?, December 2024
6 Source: Building Institute NSW – When Is a Construction Permit Required?, September 2024
7 Source: NSW Government – Complying Development: What to tell your neighbours
8 Source: realestate.com.au – Should you renovate or rebuild? How to decide, November 2024
