Cost of Extension Melbourne: A Homeowner's Guide

So, you’re thinking about extending your Melbourne home. It’s an exciting prospect, but the first question on everyone's mind is always the same: what’s it going to cost?

The truth is, there's no single, simple answer. But for a standard ground-floor addition in Melbourne, a good starting point is to budget somewhere between $4,400 and $6,116 per square metre. Think of this as your foundational figure—the base from which we can start planning your dream space.

Your Guide to Melbourne Extension Costs

Expanding your home is one of the most rewarding projects you can undertake, but let's be honest, figuring out the finances can feel like a minefield. The final price isn't just one number plucked from the air; it’s a living, breathing figure shaped by a whole host of interconnected decisions you'll make along the way.

It’s a bit like customising a new car. The base model has its price, but every single upgrade—from a more powerful engine to premium leather seats—adds to the final invoice. Your extension is no different. Many variables affect the cost of an extension in Melbourne, such as the access to the site, any demolition required, the design of the extension, the type of rooms being added, and the chosen fixtures, fittings, and level of finishes.

This guide is here to cut through the noise and give you a realistic, clear-eyed view of what to expect. We'll kick things off by establishing those all-important ballpark figures, looking at the typical cost-per-square-metre for different types of extensions. This gives you a solid financial baseline and helps set achievable expectations from day one.

Before we get into the nitty-gritty, let's pull all those numbers together for a quick overview.

Melbourne Extension Cost Estimates at a Glance

This table gives you a snapshot of what you can generally expect to invest per square metre for different types of home extensions here in Melbourne.

These figures are a great starting point, but remember they represent the build cost itself. Let's dig into what actually drives these numbers up or down.

Key Variables That Influence Your Budget

Every project is unique, and there are a handful of key factors that can really shift the needle on your final budget. Understanding these from the get-go is crucial.

Here are the big-ticket items that influence your costs:

• Design of Extension and Complexity: It's simple, really. A straightforward, rectangular addition will cost less than an intricate architectural design with bespoke features and complex rooflines.
• Access to the Site and Conditions: How easily can we get machinery and materials to the work area? A tight, narrow block in a suburb like Carnegie might demand specialised equipment or more manual labour, which naturally adds to the cost.
• Level of Finishes, Fixtures and Fittings: This is where you have a lot of control. Your choice of fixtures, fittings, and materials—from standard-range tapware to imported Italian marble—will have a massive impact on the budget.
• Type of Rooms Being Added: Creating 'wet areas' like kitchens, bathrooms, or laundries is far more expensive per square metre than adding a bedroom or living room. The intensive plumbing, waterproofing, and electrical work all add up.
• Demolition Required and Preparation: How much of your existing home needs to be removed or altered to make way for the new structure? This preparatory work is a significant part of the initial outlay.

Industry benchmarks for 2025 show that more complex projects, like going up with a second-storey addition, can range from $4,587 to $6,422 per square metre—that’s roughly 50% more than a ground-floor project.

It’s also vital to remember that these figures typically cover the build itself. Professional fees for architects, designers, and engineers can add another 10-20% on top of your construction cost. For more detailed insights, you can find a great breakdown of Melbourne extension costs on Magic New Family Homes.

Now that we have the foundations in place, we can start exploring specific budgets and line items in more detail.

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Understanding Typical Project Budgets

While a cost-per-square-metre rate is a handy starting point, it doesn't paint the full picture. To really get a feel for the financial scope of your project, we need to look at the total investment for common Melbourne extensions. This is about moving from a ballpark figure to a realistic, all-in budget that connects your vision with what’s genuinely achievable.

Think of it like planning a holiday. Knowing the nightly rate for a hotel is useful, but the real cost includes flights, food, activities, and transfers. It’s the same with an extension—the final cost of an extension in Melbourne covers everything from the first design sketch to the final coat of paint.

From Single Rooms to Major Expansions

The biggest driver of your total cost will always be the scale and function of your extension. A simple, single-room addition will naturally sit at the lower end of the investment scale. A multi-room project with complex plumbing and electrical work, on the other hand, will require a much larger budget.

Let’s look at a few common scenarios to see how this plays out:

• A Single Room Addition (e.g., Bedroom or Study): This is the most straightforward extension. With no plumbing or specialised fixtures, the costs are mainly tied up in the structure, cladding, and basic electricals.
• A Full Kitchen and Dining Expansion: Now we're talking about a major leap in complexity and cost. Kitchens are the most expensive rooms per square metre, hands down. You’re factoring in custom cabinetry, benchtops, high-end appliances, plumbing, and intricate electrical layouts.
• A Second-Storey Build: Going up instead of out is often the most expensive option. It involves extensive structural engineering, new roofing, scaffolding, and serious reinforcement of the existing ground floor to take the extra load.

Adding rooms with plumbing—what we call 'wet areas'—dramatically pushes up the budget. Every new bathroom, ensuite, or laundry can add $30,000 to $50,000 (or more) to your total project cost, all depending on your choice of finishes and fittings. This is exactly why a ground-floor kitchen and living extension can easily cost double what a simple bedroom addition of the same size would.

Realistic Budget Ranges for Melbourne Extensions

So, what are people actually spending on these projects in the real world? Looking across the board, most home extensions in Melbourne fall somewhere in the $250,000 to $600,000 range. For anyone considering an extension, it's also worth diving into the factors that affect the building costs per square metre in detail.

More straightforward additions, like a new living area, can sometimes be done for under $250,000. In contrast, second-storey extensions typically start around the $350,000 mark and can easily climb past $700,000. Over the last year, custom builders have reported project values anywhere from $350,000 to $1,100,000, which just goes to show how much your individual choices can shape the final price tag.

The total project cost is a direct reflection of complexity. A project that requires significant demolition, reconfiguring existing spaces, or intricate architectural details will always command a higher budget than a simple, self-contained addition.

 

What Pushes a Project Towards the Higher End?

Several key factors will nudge your project towards the upper end of that $350,000 to $700,000 bracket—and often beyond it. Knowing what these are ahead of time helps you make smarter decisions as you finalise your design and scope.

Here’s what typically increases the total investment:

• Architectural Complexity: Custom designs with unique angles, soaring ceilings, or large spans of glass demand more engineering, specialised labour, and premium materials.
• Site Challenges: Difficult access on a tight block in a suburb like Carnegie can drive up labour and delivery costs. A sloping site or tricky soil conditions might also mean more extensive—and expensive—foundation work.
• Premium Finishes: Your choice of fixtures and fittings plays a massive role. High-end selections for flooring, tapware, lighting, and joinery can add tens of thousands to the final bill.
• Structural Changes to the Existing Home: If your extension involves knocking out load-bearing walls or completely reconfiguring the existing layout to create that beautiful open-plan feel, it adds a whole new layer of complexity and cost.

What Really Drives the Final Cost of Your Extension?

Getting a handle on the per-square-metre rates and general project budgets is a great start, but the real story of your final invoice is written in the details. The cost of an extension in Melbourne isn’t a fixed menu price; it’s a dynamic figure, shaped by a unique mix of variables tied to your specific home, your block of land, and your ultimate vision.

Think of it like commissioning a beautiful piece of bespoke furniture. The timber has a base cost, sure, but the final price comes down to the complexity of the design, the skill of the artisan, the intricacy of the joinery, and the quality of the final finish. Your extension works exactly the same way—every single choice, from the structural engineering down to the doorknobs, has a part to play in the final number.

Let's break down the key factors that can cause your budget to either hold firm or start climbing, so you can make smart trade-offs and know exactly where your investment is going.

Site Access and Demolition

Before a single new joist can be laid, your site needs to be prepped, and this first stage can often hold some hidden costs. Access to the site is a huge one, especially in established suburbs like Carnegie, where tight streets, narrow laneways, and mature gardens can make getting materials and machinery on-site a real headache.

If access is tricky, we might need to use smaller trucks, bring in more manual labour, or even hire specialised equipment like a crane to lift materials over your existing roof. Each of those workarounds adds time and money to the project before the real building has even started.

Demolition required is another critical step. It’s not just about knocking things down; it's a careful, surgical process of removing existing structures while protecting the parts of your home you want to keep. This can involve anything from asbestos removal and disconnecting services to installing temporary structural supports—all specialised tasks that come with their own costs.

Design Complexity and What's Inside

The architectural design of the extension is easily one of the biggest cost drivers. A simple, rectangular ground-floor addition with a standard roof is always going to be more budget-friendly than a design that features curved walls, cantilevered sections, split levels, or a complex, architectural roofline.

Every non-standard angle, custom-made window, and architectural flourish requires more detailed engineering, more specialised labour, and often more expensive materials. Each one adds another layer to the final cost.

On top of that, the type of rooms being added will dramatically change the bottom line. It's a classic mistake to think all square metres are priced equally. They absolutely are not.

• Dry Rooms: Bedrooms, living areas, and home offices are the most affordable spaces to build. Their needs are pretty straightforward: structure, insulation, plasterboard, basic electricals, and flooring.
• Wet Rooms: This is where things get expensive. Kitchens, bathrooms, laundries, and ensuites cost far more per square metre. They need intricate plumbing, waterproofing, tiling, ventilation, specialised cabinetry, and a whole lot of fixtures and fittings, which can easily double or even triple the cost compared to a bedroom of the same size.

Fixtures, Fittings and Your Level of Finish

This is where your personal taste meets the budget head-on. The level of finishes, along with your chosen fixtures and fittings, has a massive impact on the final cost of an extension in Melbourne. The spectrum here is vast, running from perfectly functional and budget-friendly choices all the way to high-end, imported luxury.

Just think about the difference between:

• Standard laminate benchtops versus a slab of imported natural stone.
• Off-the-shelf flat-pack joinery versus custom-built, integrated cabinetry.
• Basic ceramic tiles versus hand-laid mosaic or large-format porcelain.
• Standard aluminium windows versus thermally broken, double-glazed architectural window systems.

Every one of these choices is a trade-off between aesthetics, performance, and price. While those high-end finishes deliver that premium feel and incredible durability, they can also send the costs soaring. That’s why it’s so important to have a clear idea of your priorities right from the start.

The combined effect of all these decisions is significant. Beyond the basic build rate, site issues like poor soil or tricky access can add $10,000 to $30,000 just for preparatory work. Professional fees for design and approvals might add another $15,000–$40,000, and a 10-20% contingency fund is non-negotiable for handling those inevitable surprises. For a deeper look into how these variables play out, you can explore this guide to home extension costs on CD Construct. Understanding these moving parts is the key to planning a realistic budget without any nasty shocks down the line.

How to Build a Realistic Extension Budget

A solid budget is your project's command centre. It’s the tool that turns a big, intimidating number into a clear, manageable roadmap. While every extension in Melbourne has its own unique price tag, understanding where the money typically goes is the secret to staying in control of the finances. Think of it less as one giant bill and more as a series of planned, interconnected costs that bring your vision to life.

Getting your finances structured right from the start takes all the guesswork out of the journey. When you break down the total investment into distinct categories, you can track spending, plan for upcoming payments, and make sharp, informed decisions every step of the way. This is how you avoid those dreaded budget blowouts and ensure there are no nasty surprises waiting around the corner.

Deconstructing Your Extension Costs

One of the first things to get your head around is that the "build cost" is only one part of a much bigger picture. It’s a common mistake to focus only on the builder's quote, but there are several other critical expenses you absolutely must account for from day one. These are the non-negotiable costs that bookend the construction phase and form the true foundation of a realistic budget.

This infographic shines a light on some of the key costs that sit outside the main construction contract.

As you can see, the preliminary fees, site works, and a healthy contingency fund aren’t small change—they are essential, substantial parts of your overall project budget.

A Typical Budget Allocation

To make this real, let’s look at how a typical extension budget breaks down by percentage. Of course, your project will have its own unique profile, but these figures give you a reliable starting point for planning your finances. For a more tailored estimate, you can explore our detailed home extension cost estimator.

To give you a clearer picture, here’s a sample breakdown for a hypothetical $250,000 project. It shows how the funds are typically spread across the different stages of the build.

Sample Extension Budget Breakdown (Based on a $250,000 Project)

This table provides a great snapshot, but let’s dive into what each of these categories actually covers on the ground.

Understanding Each Line Item

A detailed budget gives you clarity and confidence. When you know what’s included in each phase, you can ask the right questions and see exactly where every dollar of your investment is going.

• Pre-Construction Fees: This is all the crucial professional work that happens before a single sod of earth is turned. It covers your architectural design and drafting, structural engineering reports, soil tests, and all the council fees for planning and building permits.
• Site Preparation & Demolition: This is the cost of getting your block ready for action. It can include demolishing an old carport or pergola, clearing the site, excavation, and setting up temporary site fencing and services.
• Structure & Lock-Up: This is the biggest slice of the pie. It pays for the foundations (whether it’s a concrete slab or stumps), the timber or steel framing for the walls and roof, and getting the building to the "lock-up" stage. That means it’s secure and weatherproof, with all external doors, windows, and roofing installed.
• External Finishes: Now we’re making it look good from the outside. This line item covers your chosen wall cladding (like brickwork, weatherboards, or render), plus gutters, downpipes, and any external painting needed to complete the look.
• Internal Fit-Out & Finishes: This is where the empty shell starts to feel like a home. This category covers everything from insulation and plasterboard to flooring, tiling, cabinetry for the kitchen and bathrooms, painting, and fitting all your fixtures like taps, sinks, and lights.
• Services: These are the essential arteries of your new space. It covers all the labour and materials for the plumbing (both the initial "rough-in" and the final fit-off) and the electrical work, including all wiring, power points, and any switchboard upgrades.

Contingency Fund: This might just be the most important line item in your entire budget. A contingency of 10-20% isn’t an 'optional extra'; it’s a non-negotiable safety net. It’s there for the curveballs that almost every project throws, from hitting unexpected rock during excavation to finding hidden structural issues in the existing house.

By building your budget with this level of detail, you’re not just guessing—you’re creating a powerful financial tool. It empowers you to navigate the entire process with clarity, keeping your project firmly on track from start to finish.

Understanding Project Timelines and Approvals

When you’re building anything, time really is money. This is especially true when figuring out the cost of an extension in Melbourne. Your project's timeline isn’t just a calendar; it’s a direct line to your final budget. A delay doesn't just mean waiting longer to enjoy your new space—it can actively drive up costs through things like holding fees, revised builder quotes, and sudden hikes in material prices.

Getting your head around the journey from a simple idea to the final handover is key. Even a straightforward extension is a sequence of detailed steps, and each has its own timeline. By mapping this out, you can see how a delay in one area can create a costly domino effect down the line.

The Typical Phases of an Extension Project

A well-run extension follows a clear, structured path. While no two projects are identical, the main stages and their rough timings are pretty consistent, giving you a realistic picture of what’s ahead.

Here’s a breakdown of how it usually unfolds:

• Phase 1 – Design and Engineering (4-8 weeks): This is where your vision starts to become real. We'll have initial chats, develop architectural drawings, and bring in a structural engineer to make sure the design is solid and up to code.
• Phase 2 – Council Approvals and Permits (3-6 months): Honestly, this is often the most unpredictable part. Submitting plans to your local council, like the City of Glen Eira for a project in Carnegie, and then waiting for the building permit can be a long game. Council backlogs or a request for more info can easily slow things down.
• Phase 3 – Construction (4-9 months): Once the permit is in hand, the tools come out. How long this takes really depends on how complex the job is. A simple ground-floor addition will be much quicker than a tricky second-storey build with high-end finishes.
• Phase 4 – Final Inspections and Handover (1-2 weeks): The home stretch. This involves final checks to ensure everything meets building regulations, followed by the official handover of your beautiful new space.

How Delays Impact Your Bottom Line

A hiccup at any point in this timeline can introduce costs you didn't plan for. For example, a six-month delay waiting for council approval could mean you’re hit with a 5-10% increase in material costs simply due to market changes.

Time-related costs aren't just an abstract idea; they hit you right in the wallet. A longer construction phase might mean you’re paying rent elsewhere for longer than expected, and your builder’s fees may need to be adjusted to cover the extended project schedule.

Naturally, more complex projects have longer timelines, which means they’re more exposed to these kinds of risks. One of the best ways to get ahead of the game is to really understand the approvals process. For a deep dive, you can learn more about how to get a building permit in our detailed guide. Planning for these stages and building in a buffer isn't just a good idea—it's essential for keeping your budget on track.

How an Extension Increases Your Property Value

Thinking about an extension purely in terms of cost is only seeing half the picture. A well-designed addition is a powerful investment—not just in your property's future value, but in your family's day-to-day life. The conversation shouldn't just be about the cost of an extension in Melbourne; it needs to be about the return. A thoughtful extension doesn't just add rooms—it adds real, tangible equity to your biggest asset.

This is especially true in sought-after Melbourne suburbs like Carnegie, where the demand for functional, modern family homes is always strong. Any builder can add square footage. The real magic, and the best financial returns, come from adding the right kind of space.

Projects with the Strongest ROI

When it comes to boosting property value, not all extensions are created equal. Some additions consistently deliver a stronger return on investment because they directly answer what today’s discerning buyers are searching for.

These are the projects that really pack a punch:

• Adding Bedrooms: This is one of the most reliable ways to lift a property’s value. An extra bedroom instantly widens your home’s appeal to growing families, putting it in a whole new market bracket.
• Creating Open-Plan Living Areas: The modern family lives in open, connected spaces. Knocking down walls to create a seamless flow between the kitchen, dining, and living areas is at the top of almost every homebuyer's wish list.
• Indoor-Outdoor Connection: We’re blessed with a great climate in Melbourne, and buyers want to make the most of it. An extension that elegantly opens onto a deck or alfresco area creates a highly desirable lifestyle feature that adds immense appeal.

For a more detailed look, we’ve put together a guide on the specific renovations that increase home value.

The Invaluable Lifestyle Return

Beyond any figures on a sales report, a home extension delivers something that can’t be measured in dollars: an upgrade to your quality of life. It’s about getting the home you need without leaving the community you already love.

An extension gives you the power to reshape your home around your family's needs, creating a space that not only works better but feels fundamentally more 'you'. This emotional return is often the most rewarding part of the entire journey.

This is the real lifestyle return. It’s the simple joy of having enough space for everyone to breathe, the improved daily rhythm of a layout that just works, and the quiet pride you feel living in a beautiful, considered home.

It means you can stay connected to your neighbours, your local schools, and your favourite parks here in Carnegie, all while getting a home that’s perfectly tailored to your life right now. When you see it this way, you start to appreciate the profound, long-term value you’re truly creating.

Answering Your Top Questions on Extension Costs

To round things out, let's tackle some of the most common questions we get from Melbourne homeowners thinking about an extension. Getting clear on these details often helps people move forward with real confidence.

We'll touch on everything from adding a master suite to the classic "extend up or out?" debate. Your choices on fixtures, finishes, and design complexity will naturally steer the final figure.

How Much to Add a Master Bedroom and Ensuite?

A new master suite is one of the most popular additions we see, and for good reason. For a project like this, you should generally plan for a budget somewhere between $120,000 and $190,000+, depending entirely on the size and level of luxury you’re aiming for.

Keep in mind, the ensuite is a huge part of that cost. With all the detailed plumbing, waterproofing, tiling, and high-quality tapware involved, the bathroom alone can easily account for $45,000 to $60,000 of the total budget.

Are There Hidden Costs I Should Plan For?

Absolutely, and it pays to be aware of them from the start. Things that can catch people by surprise often include council application fees, soil testing, discovering unexpected structural issues in your current home, or needing to upgrade your main switchboard to handle the extra load.

This is exactly why we always say a contingency fund isn't just a 'nice-to-have'—it's non-negotiable. Setting aside an extra 10-20% of your construction budget is the safety net that protects you from these kinds of curveballs.

Is It Cheaper to Extend Out or Up?

If you're looking at it purely from a cost-per-square-metre perspective, building a second storey is almost always the more expensive option. The amount of structural engineering required to support a whole new level, plus the complex roofing and scaffolding, adds a significant premium.

However, money isn't the only factor. For homeowners on smaller blocks in suburbs like Carnegie, going up is often the only practical way to get the space you need without sacrificing your entire backyard. It's a trade-off between cost and preserving your outdoor lifestyle.

How Can I Reduce the Cost of My Extension?

Looking for ways to keep the budget lean? Start with the design. A simpler architectural footprint with a standard roofline will always be more cost-effective than something highly complex. Opting for quality, mid-range fixtures and finishes over top-of-the-line luxury items will also make a huge difference to the bottom line.

Another big one is minimising major structural changes to the existing house, like moving load-bearing walls. Working with a design-and-build firm like ours from day one is also a smart move, as we can help you design a beautiful extension that’s realistic for your budget right from the get-go.

Ready to transform your vision into a beautifully crafted reality? The team at Envy Abode specialises in creating bespoke extensions that perfectly blend with your Melbourne home and lifestyle. Contact us today to start the conversation.