Written and reviewed by the Finance Director at Little Home Loans
Quick answer: Australian builders publish extension costs in two incompatible ways — some quote a whole-project total, others quote construction only and list consultants, permits and reports separately. That single difference can move the same job by tens of thousands of dollars on paper without anything changing on site. Below are three named builders’ own published 2026 figures, shown as they published them, with what each figure covers. We have not averaged them, because they are not measuring the same thing.
Why we will not give you one number
Search “house extension cost” and you will be offered a confident national figure per square metre. Treat it carefully. The published ranges below come from three real Australian builders writing in 2026, and they differ on:
- State — Sydney and Melbourne price differently, and permit regimes differ.
- What is inside the number — one of these three explicitly quotes construction alone and itemises design, engineering, reports and permits outside the rate.
- Finish level — the same floor area at mid-range versus high-end finish is a different build.
- Whether wet areas are included — a bathroom or kitchen inside the extension is the single biggest swing factor.
Averaging those into one figure would produce a number that describes no real project. So here they are as published.
What three Australian builders published in 2026
| Source | Region | Published | What they published | What the figure covers or excludes |
|---|---|---|---|---|
| Buildana | Sydney | 9 April 2026, updated 15 April 2026 | Home extensions overall $120,000 – $350,000+. Ground floor by size: 20–30 m² $80,000 – $150,000; 30–50 m² $150,000 – $250,000; 50–70 m² $250,000 – $350,000+. Rear open-plan kitchen and living addition $150,000 – $300,000. Range of $2,500 – $4,500 per m² from basic to premium finishes. | Presented as whole-project totals by size band. Itemises specific elements separately, for example load-bearing wall removal with a steel beam $8,000 – $15,000, an open-plan kitchen with stone benchtops and custom cabinetry $35,000 – $65,000, and large sliding or bi-fold doors $6,000 – $15,000. |
| Proud Projects | Melbourne / Mornington Peninsula | 17 June 2026, updated 18 July 2026 | Ground floor, mid-range finish $2,500 – $3,500 per m²; ground floor, high-end finish $4,000 – $5,000 per m²; custom premium with bespoke finishes $5,000 – $10,000 per m². A typical 40 m² ground-floor extension at mid-range finish $100,000 – $140,000. A larger addition taking in kitchen, dining and family living $200,000 – $360,000. | Construction only. Lists separately: architect or building designer $5,000 – $20,000; structural engineer $2,000 – $5,000; energy assessment, soil tests and surveying $2,000 – $4,000; Victorian permit fees $1,500 – $4,000. Also notes Victorian builders must be VBA-registered, hold public liability cover, and provide Domestic Building Insurance for any contract over $16,000. |
| Your Story Property | Melbourne | 9 April 2026 | Single-room rear extension $2,500 – $4,000 per m², total $80,000 – $160,000. Open-plan kitchen and living extension $3,000 – $5,000 per m², total $120,000 – $250,000. Side return extension on a terrace $3,000 – $4,500 per m², total $60,000 – $120,000. | Per-m² and total by extension type. Calls out separately: wet areas within the extension $15,000 – $40,000 per wet area; asbestos removal in pre-1990 homes $5,000 – $20,000. States two identical-sized extensions can differ by $100,000+. |
Figures are each builder’s own published estimates as at the dates shown, accessed 28 August 2026. They are not quotes, they are not Little Home Loans estimates, and they are not directly comparable — see the column on what each figure covers. Building costs change; check the source before relying on any figure.
Read the table this way
Look at the ground-floor mid-range rate. Proud Projects publishes $2,500 – $3,500 per m²; Your Story Property publishes $2,500 – $4,000 per m² for a single-room rear extension. Those look close. But Proud Projects is quoting construction alone and puts design, engineering, reports and permits — plausibly another $10,500 to $33,000 on their own itemisation — outside the rate. Buildana’s Sydney figures are framed as project totals.
So the gap between “$2,500 per m²” and what you will actually transfer out of your account is not small, and it is not the same gap for every source. When you compare two builders, the first question is not the rate. It is what the rate includes.
What moves the number most
Wet areas
A bathroom, kitchen or laundry inside the extension brings plumbing, waterproofing and tiling. Your Story Property puts this at $15,000 – $40,000 per wet area. Two wet areas can outweigh a whole finish-level upgrade.
Structural work to the existing house
Opening the back of a house usually means removing a load-bearing wall and installing a steel beam — Buildana publishes $8,000 – $15,000 for that element alone. Anything that touches the existing structure carries more risk than new floor area on open ground.
What is already in the walls
Asbestos is the classic one. Your Story Property notes pre-1990 Melbourne homes often contain it in walls, eaves or flooring, and puts safe removal at $5,000 – $20,000. This is discovered, not planned for.
Site access and slope
A narrow side passage, a steep block or no crane access changes the method and the labour hours.
Consultants and approvals
Proud Projects’ itemisation is a useful checklist even outside Victoria: designer, structural engineer, energy assessment, soil test, survey, permit fees. Most extensions require a building permit and many require planning approval as well — that is time as much as money.
Finish level
The same shell at mid-range versus bespoke finishes is, on Proud Projects’ own published numbers, roughly a doubling of the per-m² rate.
Extension, or something else?
The cost figures above are worth comparing against your alternatives before you commit.
- Going up instead of out. If your block cannot spare the ground area, a second storey is the other direction. It prices differently and has its own structural questions — see our guide to second storey addition costs.
- Building separately. A granny flat or secondary dwelling can add usable space and, unlike an extension, can potentially be tenanted. We compare the two in granny flat vs extension.
- Starting again. Buildana’s own published guidance is that once an extension budget approaches $300,000+, it is worth comparing against a full knockdown rebuild. See knockdown rebuild finance and costs.
What a renovation or extension costs to fund
Extensions are rarely paid for out of savings alone, and the way they are funded changes what you can afford.
- Equity release or a loan increase — simplest where you have equity and the work is modest.
- A renovation or construction loan with progress payments — funds are drawn in stages as the build hits milestones, and you generally pay interest only on what has been drawn. This is the usual route for a structural extension. See how construction loans work and construction loan interest rates.
- A personal loan — faster, unsecured, generally more expensive, and usually only sensible for smaller cosmetic work.
Two practical points. First, lenders lend against the fixed-price building contract, so a vague quote is a funding problem as well as a budgeting one. Second, build a contingency in — Proud Projects makes the point bluntly that a job budgeted at $250,000 can quietly become $310,000 through variations once work has started.
Our renovation loans guide walks through which structure suits which job.
House extension cost FAQs
How much does a house extension cost in Australia?
There is no single reliable national figure, and the published ranges are not comparable. As examples: Buildana publishes Sydney home extensions at $120,000 to $350,000+ overall; Your Story Property publishes a Melbourne single-room rear extension at $80,000 to $160,000; Proud Projects publishes a typical 40 m² Melbourne ground-floor extension at $100,000 to $140,000 for construction alone, with design, engineering and permits on top. Which of those is closest to your project depends on state, size, finish and whether wet areas are involved.
Why do published per-square-metre rates vary so much?
Mostly because they are measuring different things. Some builders quote construction only and itemise consultants, reports and permits separately; others quote whole-project totals. Add state differences, finish level and whether the extension includes a kitchen or bathroom, and two apparently similar rates can describe very different scopes.
What adds the most cost to an extension?
Wet areas, structural work to the existing house, and surprises inside the existing structure. Your Story Property puts wet areas at $15,000 to $40,000 each and asbestos removal in pre-1990 homes at $5,000 to $20,000; Buildana puts load-bearing wall removal with a steel beam at $8,000 to $15,000.
Do I need council approval for a house extension?
Almost always a building permit, and frequently planning approval as well. Requirements are set by your state and local council and depend on setbacks, height, site coverage and heritage overlays. Confirm with your council before you finalise a design, because approval timeframes affect your finance as well as your build program.
Is it cheaper to extend or to knock down and rebuild?
It depends on the condition of the existing house and how much extra floor area you need. Buildana’s published guidance is to compare the two once an extension budget approaches $300,000+, and it suggests extending where the existing structure is sound, the addition is less than about 50% extra floor area, and the budget is under $250,000.
Can I borrow for an extension?
Yes. Common routes are releasing equity, a renovation or construction loan drawn down in progress payments, or a personal loan for smaller work. Lenders generally want a fixed-price building contract from a licensed builder, and progress-payment loans usually charge interest only on the amount drawn during the build.
Work out what you can fund
Once you have a scope and a builder’s figure, the useful question is what it costs to fund and whether the structure fits the build program. Talk to us.
Start your application · call 1300 391 390 · or get in touch.
Related guides
- Renovation loans in Australia
- Second storey addition cost
- Granny flat vs extension
- Knockdown rebuild finance and costs
- How construction loans work
Sources
- Buildana, Home Extension Cost in Sydney: Complete Guide (2026) — published 9 April 2026, updated 15 April 2026. Accessed 28 August 2026.
- Proud Projects, House Extension Costs in Melbourne: A Complete 2026 Pricing Guide — published 17 June 2026, updated 18 July 2026. Accessed 28 August 2026.
- Your Story Property, House Extension Cost Melbourne: Complete 2026 Pricing Guide — published 9 April 2026. Accessed 28 August 2026.
The cost figures on this page are each builder’s own published estimates, reproduced with attribution. They are not Little Home Loans estimates, not quotes, and not a substitute for a fixed-price building contract. This article is general information only and does not constitute credit or financial advice. Little Home Loans operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees.
Building out is not the only option. If your block is tight, see house raising cost in Australia — lifting the house and building underneath uses the existing footprint instead of the yard.
