Hi,
Yes, people say knocking down is more cost effective, but there are a lot of factors to take into consideration...
If you are planning to stay there for a long time, then do you want a mortgage that size?
I am in Melbourne, and would live in a similar sounding demographic suburb. The 'specs' required are pretty high spec to meet the market demographic, in other words, people would be looking for something swanky and architectural - and they cost a lot to build, min 600k.
If you are just looking to have a larger house to accommodate your family then an extension may be much cheaper (even though it would be more expensive on a per square metre basis)
Archicentre.com can advise on per sq metre building costs.
We have just gone upstairs on our house (having gone through the same thought process as yourself)..... quotes vary wildly. I interviewed 8 builders, and then ultimately 9 'extensions' companies before I found one that in my opinion had anywhere near a realistic quote. It pays to shop around.
Ours came in at 2,800 per square metre.
Hope this helps.
