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What is a knockdown-rebuild and how does it work in Melbourne?

A knockdown-rebuild (KDR) is when you demolish the existing home on your Melbourne block and build a new one in its place. In Victoria you need a demolition permit from council (or from a private surveyor for non-heritage lots), a heritage overlay check via VicPlan, then a building permit for the new dwelling. Typical Melbourne KDR total cost is $500,000-$1,200,000 all-in and takes 16-24 months from decision to keys.

Melbourne Knockdown-Rebuild 2026

What Is A Knockdown-Rebuild In Melbourne?

Name: BuildPilot Adelaide Building Industry Dataset
Creator: BuildPilot
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How KDR works in Victoria, the demolition permit and heritage overlay checks, and typical Melbourne KDR timelines + costs in 2026.

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By George Giannakakis · B.Arch.Studies · M.Arch (UniSA) · RLA300580

Last reviewed: 5 March 2026 · How we research

The Melbourne KDR process step by step

Step 1: check heritage overlay + planning zone via VicPlan (mapshare.vic.gov.au). Step 2: engage a demolition contractor for an asbestos inspection + demolition quote ($18,000-$40,000). Step 3: apply for a demolition permit (2-8 weeks). Step 4: select builder + design new home + get building permit (12-20 weeks). Step 5: demolition (2-4 weeks on-site). Step 6: rebuild (10-14 months). Step 7: Occupancy Permit + handover.

When Melbourne KDR is blocked - Heritage Overlays

Roughly 40% of inner and middle-ring Melbourne blocks sit on a Heritage Overlay (HO). Full demolition of an HO home is refused 70-90% of the time. If your block is on an HO, KDR is usually not viable - you're looking at Substantial Renovation or Rear Extension instead. Check VicPlan BEFORE you sign a builder contract.

Best Melbourne suburbs for KDR

KDR is common and cost-effective in middle + outer-ring suburbs without heritage restrictions: Templestowe, Bulleen, Vermont, Wheelers Hill, Glen Waverley, Mount Waverley, Rowville, Berwick, Sunbury, Doncaster, Blackburn, Nunawading. Bayside (Brighton, Hampton, Sandringham) has strong KDR demand but heavy overlay coverage - check each street.

Costs beyond the build

Demolition: $18,000-$40,000 (add $5,000-$15,000 for asbestos removal). Temporary accommodation during 14-22 month build: $30,000-$70,000 in Melbourne rentals. Storage of furniture: $3,000-$8,000. Utilities disconnection + reconnection: $2,000-$5,000. Landscape reset after build: $12,000-$30,000. Budget total on top of the build cost: $70,000-$140,000.

Frequently asked

How much does demolition cost in Melbourne?

A standard suburban Melbourne home (150-220m² brick or weatherboard) costs $22,000-$38,000 to demolish and cart away. Add $5,000-$18,000 if asbestos removal is required (very common in Melbourne homes pre-1985). Add $4,000-$8,000 for a big tree removal on the block. Get 3 quotes and confirm they include tip fees + asbestos disposal.

Do I need council approval to knock down my Melbourne home?

Yes - always. Even non-heritage homes need a demolition permit. If the home is under a Heritage Overlay (very common in Yarra, Stonnington, Bayside, Boroondara, Port Phillip, Melbourne CBD) you also need council planning approval for the demolition, which is refused 70-90% of the time. Check VicPlan first.

How long does a Melbourne knockdown-rebuild take?

From decision to keys: 16-24 months typically. Demolition permit + design + planning: 4-8 months. Demolition on-site: 2-4 weeks. Build on-site: 12-16 months. If a planning permit is needed for the new build (heritage adjacent, non-code-compliant), add 4-9 months.