Is It Better to Renovate or Build a New Home in Melbourne?

One of the most common questions Melbourne homeowners ask us is: “Is it cheaper to renovate, or should I build new?” The answer isn’t always straightforward. Choosing between renovation and rebuilding involves more than just cost, it's about your lifestyle, the condition of your existing property, council approvals, long-term goals, and what kind of space you truly want to live in.

At BQ Architects, we help clients weigh all the factors: budget, timeline, design goals, and local council and building regulations, to confidently choose the option that best fits our client’s home and future vision.

Renovation vs New Build: A Quick Comparison Table

Factor Renovation New Build
Cost Lower upfront (can be unpredictable) Higher upfront, more predictable
Design Control Limited by existing structure or neighbouring property Full creative freedom
Timeline Often quicker Longer planning and build phase
Council Approval Sometimes simpler Typically more involved

Is Renovating Right for You? Pros, Cons & When It Works Best

Renovation can be a smart option, especially if your home has good structural bones or holds sentimental or heritage value.

Renovation is ideal if:

  • You love your current location and community
  • Your property has strong character or heritage features
  • The structure is sound and functional
  • You want to update rather than reinvent

Pros:

  • Preserve character and charm – Great for period homes or heritage-listed properties.
  • Lower upfront costs – Renovations can be more cost-effective if the changes are minor or moderate.
  • Faster approvals – Small renovations may not require full planning permits.

Cons:

  • Hidden structural issues – Older buildings can surprise you with unexpected repairs.
  • Design limitations – You may be constrained by the existing layout and footprint.‍
  • Council restrictions – Especially in heritage areas, design changes may be limited

One of our standout renovation projects is The Westin, where we maintained the period charm while introducing contemporary living spaces tailored to modern life.

Is Building a New Home the Better Option? What to Consider

A new build offers a blank canvas, perfect for homeowners who want total design control or a highly functional, modern home.

Choose to build new if:

  • Your current home requires extensive repairs
  • You're seeking complete layout freedom and energy efficiency
  • You want predictable build timelines and costs
  • You're planning a long-term family home tailored to future needs

Pros:

  • Customised layout – Tailor every space to your current and future lifestyle needs.
  • Energy efficiency – New builds allow for sustainable materials and modern building standards.
  • Fewer compromises – You won’t be working around outdated design elements.

Cons:

  • Higher initial costs – Demolition, design, consultants such as surveyors and energy raters and construction can add up.
  • Longer timeframes – Planning, approvals, and construction take time.
  • Emotional considerations – Demolishing a family home can be a tough decision.

Our Thornbury project is a great example of how new builds allow for highly customised, family-friendly design solutions.

How Much Does It Cost to Renovate or Build a New Home in Melbourne?

In Melbourne, approximate pricing ranges:

Renovations:

  • $2,000–$4,000+ per sqm for moderate renovations
  • $5,000+ per sqm for high-end heritage or custom transformations

New Builds:

  • $2,500–$4,000 per sqm for standard custom homes
  • $5,000+ per sqm for luxury or architecturally complex builds

Variables that impact cost include:

  • Scope of structural change
  • Quality of finishes and materials
  • Site accessibility
  • Heritage or planning overlay requirements

How to Decide Between Renovating or Building New

Every project is unique, we see witness that in every brief at BQ, but here are some important questions to ask:

  • What is your total budget, including contingency?
  • Is your existing home structurally sound?
  • Are there planning overlays, zoning, or heritage restrictions?
  • Do you want to retain the home’s original character or start fresh?
  • What timeline are you working with?

At BQ Architects, we help assess these factors early in your consultation so you can move forward with confidence.

‍What You Need to Know About Council Approvals for Renovations and New Builds

Both renovation and new build projects often require council approval.

  • Renovations: May need building permits, and sometimes planning permits depending on overlays or scope.‍
  • New Builds: Typically require both planning and building permits, plus compliance with modern building codes.

Guide to Choosing Renovation or New Build

  1. Create your wishlist – Needs vs. nice-to-haves
  2. Set a realistic budget – Include a contingency (15-20% for renos, 10-15% for new builds)
  3. Consider your timeline – Can you accommodate relocation or interim living? Or will you attempt to live through it?
  4. Think long-term – Is this your forever home or a short-term step?‍
  5. Get expert advice early – A property assessment from BQ Architects, along with a quick scan of VicPlanning can save time and money‍

‍Why Work with BQ Architects?

Whether you're leaning toward renovation or a brand-new build, BQ Architects brings:

  • Deep experience in Melbourne's residential design landscape
  • A strategic approach to planning permits and council approvals
  • Design solutions that balance your lifestyle, budget, and design goals

At BQ Architects, we believe great architecture begins with understanding how you live. We’re here to design homes that support your lifestyle today, and adapt with you into the future.

Ready to Explore Your Options?

Contact BQ Architects today at 03 9077 2240 or send us an email to see how we can help you decide between renovating and building new. Let us help turn your vision into a reality.