E98. Is it cheaper to extend your home up or out?

 In this episode of the Building Design, Prime Time Podcast, Amelia and Frank explore the pros and cons of home extensions, particularly the choice between building outwards or upwards. They discuss key factors such as construction costs, structural challenges, council planning restrictions, and how different site types affect renovation options. 

Emphasis is placed on the importance of working with experienced renovation builders and allowing a 20% contingency for unexpected issues like hidden structural problems or non-compliant work. They note that while building up is more complex and expensive, it may be worth it for added views or space on a small block, whereas ground-level extensions are often simpler and more cost-effective. Ultimately, they conclude that thoughtful renovations add long-term value and lifestyle improvements, and with proper planning and quality work, overcapitalisation is less of a concern for homeowners intending to stay in their property. 

A much listen if you're looking to extend your home.  And be sure to subscribe so you don't miss a new episode each week! 

About us
Prime Design is a building design company locally owned and operated in Tasmania since 2004.  Our goal is to share as much valuable information as possible about the process of building design, extensions, and more. We will talk about a different topic each week. To suggest a topic you would like us to talk about contact us at info@primedesigntas.com.au

Disclaimer
The information provided on this podcast is for educational and informational purposes only and is not intended to be a substitute for professional advice, individual circumstances, or remedy. We strongly suggest you consult a qualified professional before taking any action based on the information provided in this podcast. The views, opinions, and information provided in this podcast are those of the hosts do not necessarily reflect the official policy or position of any other agency, organisation, employer, or company. All content provided on this podcast is provided “as is” without warranty of any kind. We make no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this podcast and will not be liable for any errors, omissions, or delays in this information or any losses, or damages arising from its use. We reserve the right to change content or delete any information provided on this podcast at any time without prior notice.

Transcript

E98. Is it cheaper to extend your home up or out?

[INTRO] (0:08 - 0:24)

Hello and welcome to the Building Design, Prime Time Podcast, focused on providing valuable information for anyone looking to undertake a new build or extension project. We'll share our tips, tricks and stories from a building designer's perspective.

[Amelia] (0:26 - 0:44)

Hello and welcome to the Building Design, Prime Time Podcast. I'm your host, Amelia. And once again, we're joined by Frank Geskus.

[Frank] (0:44 - 0:48)

Hi, Amelia. Happy Friday.

[Amelia] 

Happy Friday. 

[Frank]

And she's well into winter now.

[Amelia] (0:48 - 0:50)

It's been really cold.

[Frank] (0:50 - 0:52)

It has. Well, that does happen.

[Amelia] (0:52 - 0:53)

It does in winter. Yes.

[Frank] (0:53 - 0:54)

Especially here in Launceston.

[Amelia] (0:54 - 0:57)

Yes, it certainly does. Plenty of frosty mornings.

[Frank] (0:58 - 1:00)

But magnificent clear days.

[Amelia] (1:00 - 1:01)

But a little bit fresh still.

[Frank] (1:01 - 1:04)

Yes, but they get the radiant sun. It's quite nice.

[Amelia] (1:05 - 1:08)

Yes. Yes, it's good. What are we talking about today?

[Frank] (1:08 - 1:48)

Well, I think we should... What do you mean? You know what we're talking about.

[Amelia]

Well I hope so..

[Frank]

So, we thought we'd do a series of podcasts on renovations and additions.

Because we found some interesting stats that you're going to share with us shortly. 

[Amelia]

Yes. 

[Frank]

We feel this is really important. Because the cost of building new now is a big gap from buying existing. It is here in Tasmania anyway. And I presume it's not a lot different on the mainland.

The cost of construction has just gone ridiculous. The cost of the land has become really excessive as well. It's like everything else in today.

Everything's gone up in price massively.

[Amelia] (1:48 - 1:48)

It has.

[Frank] (1:49 - 1:56)

Yes. And this side of the world has not been immune to it. So, the percentage is horrific in the last five years.

[Amelia] (1:56 - 1:57)

Oh, definitely.

[Frank] (1:57 - 2:00)

So, you've got some interesting stats though.

[Amelia] (2:00 - 2:27)

I do. So, I've had a look on the Australian Bureau of Statistics. And basically what we've found is sort of between, you know, from 2016 up until the end of 2024, there has been a massive decrease in the amount of new builds that are being built all around Australia.

So, I guess what that means is we're seeing a lot more of, you know, your renovations and your extensions and that sort of thing.

[Frank] (2:28 - 2:32)

And probably infill. So, building units, granny flats and that type of stuff too.

[Amelia] (2:32 - 2:32)

Exactly.

[Frank] (2:33 - 2:37)

Which could be classed as new builds, but it is multi-rise.

[Amelia] (2:37 - 2:38)

That's right.

[Frank] (2:38 - 2:39)

So, it's infilling.

[Amelia] (2:39 - 2:51)

Yes. So, to give you a few stats here, it says the total number of dwelling units commenced fell by 4.4% to 41,911 dwellings.

[Frank] (2:52 - 2:54)

What period was this in?

[Amelia] (2:54 - 3:02)

In seasonally adjusted terms, that was the quarter of September 2024 to December 2024.

[Frank] (3:03 - 3:35)

There you go. So, just last year. Takes a while to get all the stats.

Don't have a good way of collecting them, I'm afraid, which is really weird. But that's interesting because if the average person can't build a new home well and they're fortunate to have a home, then you're in a good spot or you renovate. So, that's what we thought we'd do this, a series of podcasts on that.

We've spoken about reno’s before, but I think it's just a point we go over. Very interesting topics. And one of them, the one we're going to talk about today is should you go up or out?

[Amelia] (3:35 - 3:37)

Well, I hope you're talking about buildings and not me.

[Frank] (3:37 - 4:14)

Oh, settle. So, are you better off building an additional storey on your house or stay on the same level and expand? So, we're just going to talk about costs, not talking about site suitability or whatever.

So, if the average cost of an addition square metre, a new build, sorry, the cost of a new build per square metre is we're getting between $2,500 to $3,000 per square metre. Now, this is in Tasmania, okay? And there'll be people out there getting different prices, different context, okay?

[Amelia] (4:14 - 4:16)

Yes, and obviously sometimes they're more.

[Frank] (4:16 - 4:27)

Less, etc. Yeah. Depending on what you're doing.

There's a lot of variables. But in comparison, if you're doing an extension, that will potentially jump up to $3,500 to $3,800 per square metre.

[Amelia] (4:27 - 4:28)

Really?

[Frank] (4:28 - 5:07)

Due to the double handling. Yes. So, you're pulling something apart, putting something back, cleaning something up, find a problem, fix the roof, wrap it up.

So, it's not a straightforward build unless it's disconnected and then you break through last thing. But you're always finding old stuff to deal with. So, that's just on a ground level point of view.

When you go up, the cost jumps significantly more. And one part of this, think of your staircase. You've got to put a staircase.

You've got to get up there, right? A staircase will take two-thirds of an average bedroom. Four by two metres on a normal ceiling height, 2.4 metres. That's a lot of space.

[Amelia] (5:07 - 5:08)

That's heaps of space.

[Frank] (5:08 - 5:18)

Yep. So, you've just lost your bedroom. One of your bedrooms is downstairs.

Everything will fit in a cupboard. Stairs don't. Stairs have to be of a good size for safety.

But also, how are you going to get your furniture up there?

[Amelia] (5:18 - 5:18)

Oh, exactly.

[Frank] (5:19 - 5:29)

I know people say, I'll do a spiral staircase. That's fine, but you can't get your furniture up there. And there's been more accidents on spiral staircases than there have been on conventional staircases.

[Amelia] (5:29 - 5:31)

Yep, they don't seem really safe, to be honest.

[Frank] (5:31 - 6:05)

No, they don't. But if they're designed for the NCC, there's a level of safety built into them. But actually, yeah, they save you a little bit of space, but not huge.

Then, building above means that means something's going to get ripped off, i.e. your roof. So, you're ripping your roof off. You're putting a new floor in.

You've got to hold all the plaster and everything else that's already up there. Exactly. I'll guarantee it's going to crack, so you've got to patch it.

Then you're building this whole new frame. Now, so then you've got the stairs, ground floor, upper floor. Now you've lost two lots of this space.

[Amelia] (6:05 - 6:06)

You have, yeah.

[Frank] (6:06 - 6:41)

So then, before you even get started, you've spent the money on that. Then whatever you're putting upstairs, bedrooms, lounge rooms, whatever it may be, it's building up in that space. That means scaffolding.

You're working at height. So, yep, most houses will require scaffolding and from on a steep site or two-storey, but when you go up, it's not that easy because they're usually inside the exterior of the walls generally, so the scaffolding gets very complex. And you've got to think of safety.

So, just quickly, that's some of your biggest costs, and then you've got up and down the scaffolding and all that.

[Amelia] (6:41 - 6:42)

Yes.

[Frank] (6:42 - 7:01)

So, that's where we're having a lot of, have not had a lot of upper-storey extensions. I used to do them all the time, you know, 15, 20 years ago. They were quite common.

We didn't have safety worries back then. Yes. So, that's a quick one.

There is a lot more details in that. Now, the other side of that, structural upgrades.

[Amelia] (7:02 - 7:11)

That's a really good point, because I think you have mentioned in a previous podcast that for newer houses, they're usually not suitable because of the type of construction to go up.

[Frank] (7:12 - 7:55)

Yeah, generally the newer homes, which are, just say it's a concrete slab with a pine frame, you've got trusses, the internal walls are not load-bearing. That means the slab wasn't designed to handle roof and floor and live load of the upper-storey extension. So, it makes it far more complex.

So, then you have to look at structural upgrades to be able to hold that roof up on, and probably houses in the last 20 years. You go back to houses in the 80s back, generally the roofs are pitched, you know, probably early 80s. Then that means there's load-bearing walls everywhere.

All old homes in the post-war, in the 50s and that, a lot of them are load-bearing walls internally, and it's far easier. And the frames are a lot stronger, not pine, they're hardwood.

[Amelia] (7:55 - 7:55)

Yes.

[Frank] (7:56 - 8:06)

So, that's where the cost-effectiveness on older homes of going up, the structural upgrades are less. The roof removal, the rerouting of services, how to get your plumbing down.

[Amelia] (8:07 - 8:07)

Yes.

[Frank] (8:07 - 8:24)

But if you go out wide, out the sides or out the front or the rear, generally it's far easier. Yeah, and you haven't got the structural upgrades, you're just putting a new floor in and footings or whatever the case might be, then it's going to be far simpler and easier to go into it.

[Amelia] (8:24 - 8:28)

Yes. Assuming there's no site issues there.

[Frank] (8:29 - 8:43)

Also, I'll just make a quick comment about going in underneath the house if you're on a steep site. Yes, you can build in underneath. Ceiling heights use the problem, you're building retaining walls, you're dealing with subsurface water, and a lot of times you have to underpin the existing footings.

[Amelia] (8:44 - 8:45)

You did that for my sister.

[Frank] (8:45 - 8:46)

I did.

[Amelia] (8:46 - 8:46)

Yeah.

[Frank] (8:46 - 8:47)

That turned out pretty good.

[Amelia] (8:47 - 8:49)

It did. Yeah, beautiful rumpus room underneath.

[Frank] (8:50 - 8:50)

It was huge.

[Amelia] (8:50 - 8:51)

Yeah.

[Frank] (8:51 - 8:54)

But that was complex because we undermined all the footings.

[Amelia] (8:54 - 8:55)

Yes.

[Frank] (8:55 - 9:02)

So, it can be done and you've got to work out what's going to be the most cost-effective. And that's where people don't realise those hidden costs.

[Amelia] (9:03 - 9:03)

Yes.

[Frank] (9:03 - 9:10)

Site consideration. If it's a steep site, yeah, you could probably go in underneath. If it's a steep site and you want to go up, that scaffolding gets really, really high.

[Amelia] (9:10 - 9:12)

That would get quite complicated, I imagine.

[Frank] (9:13 - 9:36)

Internal drainage can always be an issue as well in how you get your sewerage out from up a floor. 

[Amelia]

Yes. 

[Frank]

How does it come down through the building? The other thing a lot of people don't consider when you go up is the noise factor. You've got to design the floors so they're not connected mechanically to the lower ceiling, so when there's bouncing, you've got kids being kids making noise, to reduce the amount of noise between the floors.

[Amelia] (9:37 - 9:40)

That's a good point. A lot of people, I guess, wouldn't think of that.

[Frank] (9:41 - 9:52)

No. And also then you can think about your heating too. This is one really good advantage, where you can run ducted heating through the floor.

You can heat upstairs and downstairs all through the duct and you don't lose your efficiency in your ducted system.

[Amelia] (9:52 - 9:54)

That's a really smart way of doing it.

[Frank] (9:54 - 10:02)

Yep. So site considerations, like I said, slopes, steep sites, sorry, they're always expensive.

[Amelia] (10:02 - 10:02)

Yes.

[Frank] (10:03 - 10:05)

Just a fact. Flat sites, beautiful.

[Amelia] (10:06 - 10:06)

Mm-hm.

[Frank] (10:07 - 10:35)

It's a shame we don't have more of those here in Tasmania. True. So it is what it is.

So with all these things, you need to then consider your planning restrictions. When you go up, compared to going out, and there's caveats on that, but going up, potentially shadows over the neighbours, house windows and stuff like that. But if you fit within an envelope, in Tasmania we have this beautiful thing of an envelope over your general residential site.

[Amelia]

Yes. 

[Frank]

You fit in there, you comply.

[Amelia] (10:36 - 10:36)

Okay.

[Frank] (10:37 - 10:43)

And this is no different if you go out from the side of your house. If you fit within the envelope, you're pretty good.

[Amelia] (10:43 - 10:48)

Yes. And you can go outside and it's a discretionary application?

[Frank] (10:48 - 11:14)

That's correct. Yep. To be fair, in Tasmania, 95% of all applications are virtually discretionary because they've got some dumbass overlay on it that gives us the willies and gives you a special report and wastes money.

That's my soapbox of the dumb shit I've got to deal with planning sometimes. The level of frustration we have for some of the requirements the planning departments ask of us. Some of it's good.

And some of it's a complete and utter rubbish.

[Amelia] (11:14 - 11:14)

Yeah.

[Frank] (11:15 - 11:21)

You know, it basically doesn't help anyone and I don't believe it makes for better sites. Anyway.

[Amelia] (11:22 - 11:23)

Moving on.

[Frank] (11:23 - 12:09)

You can cut that out if you want. I've had quite a number of different clients over the years and we've done lots of different renovations and I can't say that going up or out isn't necessarily more successful or less successful than others. I think it comes down to what the clients want to achieve out of their renovation and if you're looking at this, you need to think, what do I need to achieve?

The most common extension we do is a master bedroom and an ensuite and a walk-in robe. 

[Amelia]

Is it really? 

[Frank]

Yep.

[Amelia]

Yeah, right. 

[Frank]

Second bathroom. Who doesn't want a second bathroom?

[Amelia]

That's true. 

[Frank]

Sick of sharing it with the rest of the family. 

[Amelia]

Yes.

[Frank]

Have your own private space. Fantastic. The other one is, I'd say the second most popular, is improving your living area.

[Amelia] (12:10 - 12:10)

Yes.

[Frank] (12:10 - 12:13)

Open space, your kitchen, living, dining. That's the other big one.

[Amelia] (12:14 - 12:15)

Even a deck.

[Frank] (12:15 - 12:22)

Yes, generally with the decks. Yes, that is true. And it comes down to the extent of works but it also comes down to your budget.

[Amelia] (12:23 - 12:24)

Oh, exactly.

[Frank] (12:24 - 12:27)

You know, as soon as you add a bathroom and ensuite, well, there's $25,000, $30,000.

[Amelia] (12:28 - 12:29)

Easy.

[Frank] (12:29 - 12:53)

Easy. Unfortunately, it's just the way it is now. And if you're going to spend that money, you make sure you find a good builder that does this stuff properly.

You know, a good builder that specialises in renos and extensions is worth their weight in gold. So a guy that just builds new homes may not be experienced in doing renos because they're able to overcome challenges of old buildings.

[Amelia] (12:53 - 13:00)

Yeah, I think you're right. There's definitely a lot more problem-solving involved in renovations and extensions.

[Frank] (13:00 - 13:01)

So many things you can't see.

[Amelia] (13:02 - 13:02)

Yes.

[Frank] (13:02 - 13:35)

And that is very, very common with renos is what you can't see. The best solutions is designer and builder working together to find a problem on site. They either need us or the structural engineer to come on site.

We make a decision and you keep moving. And if it's done properly, if the drawings are well-documented and you can come up with a solution on site with problems, there's generally no extra cost because there's an element already designed into it. Unless it's some catastrophic that's failed.

And unfortunately, I have seen structural beams, footings fail badly once you've pulled things apart. People have patched them up.

[Amelia] (13:36 - 13:36)

Yes.

[Frank] (13:36 - 13:48)

So that gets a bit horrible. So we've helped out a lot of clients in the past making decisions. You don't want to fight the building.

And what I mean by that, sometimes you're dealing with really old houses that have got fireplaces.

[Amelia] (13:49 - 13:49)

Yes.

[Frank] (13:49 - 14:05)

Taking out a fireplace is so much work. Yeah. It's so messy.

And it's holding the floor, the roof, the ceiling up on these older places. Now, in saying that, sometimes it's great to pull them out because you get this big open space. Super messy.

And if you're living in it, you've got to make those decisions.

[Amelia] (14:05 - 14:05)

Yes.

[Frank] (14:05 - 14:21)

So we've helped clients make those decisions with the builder to go, well, here's, you know, is this an advantage or not? How do you want to live in this house? The other one that we do very common on the really old houses where they've got lean-tos off the back of the old.

[Amelia] (14:21 - 14:22)

Oh, yes.

[Frank] (14:23 - 14:37)

You know, your old four-basic room house with the central hallway and they've got the veranda that's been filled in and extended, extended, extended with bathroom, kitchen, laundry all put in there. And now it's just a shambles. Ripping it off and redoing it and doing it properly.

[Amelia] (14:37 - 14:45)

We've done a project where it's been done in stages, these extensions. And it just looks like chopped liver, all different roof heights.

[Frank] (14:46 - 14:46)

Oh, it's unbelievable.

[Amelia] (14:47 - 14:52)

And it leaks. Oh, it looks terrible. But when it's been renovated and extended properly...

[Frank] (14:53 - 14:54)

Or pulled down and started again.

[Amelia] (14:54 - 14:57)

Exactly. It does look amazing.

[Frank] (14:58 - 15:22)

And you've also got to consider something too. The value of property has gone up. There's no doubt extra equity in your home to be able to improve it.

[Amelia]

Yes. 

[Frank]

But don't look at trying to renovate and flip because from everyone that I talk to in this space at the moment, it's very hard to make a good buck out of flipping. So if you're going to do this, you're going to be there for a while.

[Amelia] (15:22 - 15:22)

Yes.

[Frank] (15:22 - 15:31)

So you've got payback periods. And you've got to think about what that payback period is. If you're going to be there six, seven, eight years, it's worth it because you're using it, you're living it and it suits your lifestyle.

[Amelia] (15:32 - 15:32)

Yes.

[Frank] (15:33 - 15:43)

But then you may consider other extensions later on or other ideas, sheds. And we had a backyard episode not so long ago. Sheds, decks, pools, whatever it may be.

[Amelia] (15:43 - 15:43)

Yeah.

[Frank] (15:43 - 15:44)

Barbecue areas.

[Amelia] (15:44 - 15:48)

I guess that brings another point too about overcapitalising on your property.

[Frank] (15:49 - 15:50)

It's hard to judge.

[Amelia] (15:50 - 15:51)

It is hard to judge.

[Frank] (15:51 - 15:54)

If you're going to be there a long time, I don't think there is.

[Amelia] (15:54 - 15:54)

That's a fair point.

[Frank] (15:55 - 16:02)

Because if you're using it and it improves your lifestyle, I don't think, unless you're being silly about it.

[Amelia] (16:02 - 16:02)

Yeah.

[Frank] (16:03 - 16:21)

But a good quality reno extension that makes it very nice to live in, makes it comfortable to live in, whether you're a single or a couple or a family, you're using it, you get the benefit of exactly how you want it within your budget. So then you're getting the benefit for a period of time.

[Amelia] (16:22 - 16:22)

Yes.

[Frank] (16:23 - 17:09)

So people talk about that, but you've got to really think about what are you actually overcapitalising on? Yeah, it's true. So, yeah, just a couple of takeaways on that.

Ground floor extensions are generally cheaper and you get more bang for your buck for your space, but they do eat into your land area, whether that's important or not, depending if you've got a small block of land. The second story additions cost more, as I've already discussed, but for some people they still want to go up because it might be because of the view. Yeah, that's true.

And that view could be, you might think it's overcapitalising doing the works, but that view actually adds a heap of value.

[Amelia] (17:09 - 17:12)

Yeah, you could be totally right on that.

[Frank] (17:12 - 17:36)

Yeah, and that's all the research you've got to do. Be very careful on the hidden costs. Always allow 20% contingency when you're doing renos because you're going to find stuff in there and go, oh, you're kidding me.

As I've done myself, electrical, plumbing, that's all dodgy bodgy, and we had to redo the whole lot. And most tradespeople are just trying to do the right thing to make sure it complies.

[Amelia] (17:37 - 17:37)

Yes.

[Frank] (17:37 - 17:43)

And they're not allowed to work on it unless they upgrade it. Yeah, and things will always surprise you.

[Amelia] (17:43 - 17:45)

Oh, there's always something, yeah.

[Frank] (17:46 - 17:52)

But then there's cool stuff, like you find old newspapers and old bits and pieces behind walls or there's a hidden cavity.

[Amelia] (17:52 - 17:52)

Or money.

[Frank] (17:53 - 17:58)

Yeah. 

[Amelia]

Yeah, I did.

[Frank]

I found some pennies in it at my very first house. Not worth anything, but anyway.

[Amelia] (17:58 - 18:01)

We found some cash tape to the back of a drawer.

[Frank] (18:01 - 18:04)

Oh, seriously?

[Amelia]

Seriously. 

[Frank]

Oh, that's cool.

[Amelia] (18:04 - 18:04)

Yeah.

[Frank] (18:05 - 18:06)

Pounds or current?

[Amelia] (18:06 - 18:13)

I don't know, current. 

[Frank]

Oh, right, okay. 

[Amelia]

And there was some under the vinyl when we ripped it up for the kitchen renovation.

[Frank] (18:14 - 18:18)

Cash under the vinyl. 

[Amelia]

I know. 

[Frank]

Forget putting it under the mattress.

[Amelia] (18:18 - 18:19)

I know.

[Frank] (18:20 - 18:33)

So other things you've got to consider is your council restrictions, and as I mentioned, some of the council planning is reasonable and some of it's not. So slope, upper storey, overshadowing, but even single storey you could have the same problem.

[Amelia] (18:33 - 18:34)

Yeah. Yep.

[Frank] (18:34 - 18:55)

Because of the topography of your site. And just also be aware, this will potentially raise the value of your property. If it's nicely renovated, it's done well, the quality, you're adding equity.

And if you're on the long term, like I said, overcapitalisation, I don't think so. If you're going to be there for a period of time, it's not overcapitalising.

[Amelia] (18:55 - 19:07)

No. I've been into some renovated properties, and I couldn't even tell that they were renovated. I thought they were new because they had done such an amazing job with the renovations.

[Frank] (19:07 - 19:26)

And it's also done by quality people because I've also seen, it looks amazing, and it's the biggest Pollard dog instrument hidden behind it. It's what I call a jam job. It's just no permits, no waterproofing, kitchens put together, but someone had the skill to do a really good job of it.

[Amelia] (19:26 - 19:39)

Yep. And I guess this is also sometimes where you pick up if works have been illegal. 

[Frank]

Exactly. If it's illegal, don't touch it. 

[Amelia]

Yeah. You might not have known when you bought the property and it's, you know, you go to do renovations, you're like, oh, that's not supposed to be there.

[Frank] (19:39 - 19:46)

No. Yeah, we've spoken many, many times about this. So you need to get it checked out.

Yes. So they're my takeaways.

[Amelia] (19:47 - 19:48)

They were good.

[Frank] (19:49 - 19:49)

You think so?

[Amelia] (19:49 - 20:07)

Yeah. We might wrap it up there, folks. Thanks for listening to the Building Design, Prime Time Podcast.

[Frank]

Catch ya’s later. 

[OUTRO]

You're listening to the Building Design, Prime Time Podcast.