Home extensions represent one of the biggest investments homeowners make, yet many underestimate the true cost. Home extensions prices vary dramatically depending on location, type, and hidden factors most people overlook.

At Home Owners Association, we’ve seen budgets blow out because owners didn’t account for permits, structural surprises, or material price swings. This guide breaks down exactly what you’ll pay and where your money actually goes.

What You’ll Actually Pay for an Extension in Australia

Ground-floor extensions in Australia typically cost between $2,500 and $4,000 per square metre, while second-storey additions run $3,000 to $4,500 per square metre according to 2025 data. A practical 20-square-metre extension sits around $50,000 to $90,000 before you add plumbing, electrical work, council fees, and contingencies. These base figures assume straightforward site conditions and standard finishes.

Plumbing, Electrical, and Structural Work Drives Costs Up

The moment you move plumbing fixtures, add structural changes, or face site constraints, costs climb fast. Licensed plumbers must reroute pipes, upgrade systems, and ensure waterproofing compliance when you relocate kitchens or bathrooms-this work alone can add tens of thousands to your budget. Structural changes like removing load-bearing walls or extending roof lines require engineering approval and reinforcement work that pushes expenses higher. A bedroom-and-ensuite extension commonly hits $200,000 or more, while kitchen-and-dining extensions typically range $150,000 to $300,000.

Whole-house extensions can exceed $600,000 depending on scope and location.

Labour Costs and Wage Pressure Shape Your Budget

Labour typically accounts for 40 to 50 per cent of your build cost, which matters because skilled trades remain in high demand across Australia. The Housing Industry Association reports construction output prices have grown more than 5 per cent annually, so locking in rates with builders where possible protects your budget from wage pressure. This reality means you cannot ignore labour costs when you plan your extension timeline and budget allocation.

Sydney and Melbourne Command Premium Prices

Sydney trades run 10 to 15 per cent higher than regional New South Wales, and the same pattern holds across other major capitals. If you’re in Melbourne or Brisbane, expect similar premiums compared to regional Victoria or Queensland. Planning restrictions and approval complexity vary significantly by location, which adds to the cost difference. A single-storey extension that costs $80,000 in a regional town might reach $100,000 or more in inner-city Sydney. Heritage listings, bushfire-prone area assessments, and strict setback requirements all push costs upward in established suburbs. You need quotes from local builders familiar with your council’s specific requirements because they understand exactly what approvals and compliance measures your site demands.

Site Conditions and Finishes Transform Your Final Bill

Site access constraints-slopes, tight lots, or urban congestion-often require cranes and extra labour that add thousands to your bill. Demolition and excavation add $1,500 to $4,000 for small jobs and $5,000 to $15,000 for full slab removal. Finishes have enormous impact: DIY or budget finishes might cost $10,000, while high-end kitchen cabinetry, tiling, and fixtures can push fit-out costs to $60,000 or more. Include a contingency of at least 20 per cent of total build cost to handle unforeseen issues discovered during construction (asbestos, outdated electrical systems, or soil problems often emerge once work begins).

Understanding these cost drivers prepares you for the next critical step: identifying which permits and compliance expenses your council will demand before construction can start.

What Each Extension Type Really Costs

Ground-Floor Extensions: The Most Affordable Path

Ground-floor extensions remain the most affordable option because they avoid the structural complexity that second-storey work demands. A ground-floor bedroom extension typically costs $70,000 to $120,000, while kitchen-and-dining extensions run $150,000 to $300,000 depending on how much plumbing and electrical rework you need. The $2,000 to $4,000 per square metre figure for ground-floor work holds steady across most of Australia, but this assumes you’re not moving major services or dealing with challenging site conditions.

Site preparation and access constraints add significant expense. If your block slopes or access is tight, you’ll pay $3,000 to $8,000 for site preparation and crane hire. The real cost killer at ground level is plumbing relocation-moving a kitchen or bathroom adds $8,000 to $15,000 once you factor in licensed plumbing work, waterproofing, and system upgrades. Simple bedroom extensions without bathroom additions stay closer to the lower end of that $70,000 to $120,000 range because they avoid these service complications entirely.

Second-Storey Additions: Structural Complexity Drives Premiums

Second-storey additions cost significantly more because structural engineering becomes mandatory. You’re looking at $3,000 to $4,500 per square metre, which means a modest 30-square-metre second-storey bedroom suite hits $90,000 to $135,000 before permits and site works. The premium exists because engineers must assess foundation capacity, roof load distribution, and often recommend steel beams or foundation reinforcement that ground-floor work doesn’t require.

Stairs, roof modifications, and access during construction add thousands more to your budget. These structural demands make second-storey work substantially more expensive than ground-floor alternatives, even when you compare similar floor areas. The engineering assessment alone can cost $3,000 to $5,000 depending on complexity, and that’s before construction begins.

Granny Flats and Secondary Dwellings: A Different Cost Category

Granny flats and secondary dwellings occupy a different cost universe entirely-these are effectively small self-contained homes, not simple extensions. A basic granny flat typically runs $150,000 to $250,000 depending on whether you’re converting existing space or building new. If you’re building new, expect costs closer to $3,500 per square metre because secondary dwellings demand full kitchen and bathroom facilities, separate metering, and often more stringent council approvals than standard extensions.

The approval pathway differs significantly by location. Some councils allow granny flats under complying development certificates if they meet size and setback rules, while others require full development applications that add $2,000 to $6,000 in lodgement fees alone. Your council’s specific granny flat policy matters far more than national averages because some areas have relaxed rules while others impose strict limits on occupancy or rental income.

Understanding these cost variations by extension type prepares you for the next critical step: identifying which permits and compliance expenses your council will demand before construction can start.

What Permits, Surprises, and Price Swings Actually Cost

Council Approvals and Compliance Fees

Permits and council approvals represent real money that most homeowners underestimate. A development application lodgement in NSW costs $2,000 to $6,000, and that’s before building inspections ($500 to $1,500), plan checking, and certification fees pile on top. If your council requires a complying development certificate instead of a full DA, you’ll pay around $1,000 in CDC fees, which saves time and money, but only if your extension qualifies under strict size and setback limits. Many extensions fail to qualify because they exceed the 60 square metre single-storey limit or breach the 900 millimetre setback rule that NSW planning rules impose.

You need to check your specific council’s eligibility criteria through the NSW Planning Portal before you assume CDC savings apply to your project.

Structural engineers add another $1,000 to $5,000 depending on complexity, with basic projects sitting around $1,000 and complex load-bearing wall removals reaching $5,000. These compliance costs are non-negotiable and must appear in your budget from day one, not discovered halfway through planning.

Asbestos, Electrical, and Plumbing Surprises

Unexpected structural issues emerge during construction far more often than homeowners anticipate, and they destroy budgets with alarming speed. Asbestos in older homes costs $2,000 to $8,000 to remove safely depending on quantity and location, and it only appears once demolition begins. Outdated electrical systems often require switchboard upgrades ($3,000 to $6,000) when you add significant new circuits and power points that modern building codes demand. Plumbing upgrades run $3,000 to $8,000 for rough-in work alone when existing pipes cannot handle new fixtures or pressure requirements.

Soil problems on sloped blocks or sites with poor drainage can add $5,000 to $15,000 for proper foundation work and drainage solutions. These surprises explain why you should carry a contingency fund of at least 20 per cent of your total build cost, not the 10 per cent that some builders suggest.

Material and Labour Price Fluctuations

Building construction prices rose 1.3% according to the ABS, meaning a $200,000 extension quoted in January could cost noticeably higher by June if labour and materials rise. Lock in pricing with your builder where possible and obtain quotes from multiple contractors simultaneously so you compare prices at the same point in time, not weeks apart when market conditions may have shifted.

Final Thoughts

Home extensions prices depend on far more than square-metre rates. You’ve seen how ground-floor work costs $2,500 to $4,000 per square metre, second-storey additions jump to $3,000 to $4,500 per square metre, and hidden costs like permits, structural surprises, and labour pressure can easily add $20,000 to $50,000 to your final bill. Site conditions, plumbing relocations, council approvals, and material fluctuations all compound the complexity, transforming a straightforward $70,000 bedroom extension into $120,000 once everything that actually happens on site comes into play.

Contact five firms to secure three solid quotes, and ensure each quote breaks down labour, materials, permits, and contingencies separately so you compare apples to apples. Quotes obtained weeks apart differ significantly because labour rates and material prices shift constantly. Ask each builder about site-specific challenges, council approval timelines, and their experience with your council’s particular requirements, since a builder familiar with your area understands exactly which approvals you’ll need and what compliance costs to expect.

Define your scope clearly, check your council’s eligibility rules for complying development certificates, and set aside a contingency fund of at least 20 per cent of your total budget before you commit to any extension. Start conversations with local builders now, not after you’ve finalised your design, because their input on costs and feasibility matters early. We at Home Owners Association support homeowners with expert guidance on extension projects to help you navigate your investment confidently.