a long time ago I learnt one BIG FAct.......that is....the price of established houses rises with the cost to build a new house............and it may not be such a problem in a big city, but out of town a bit,,,,,,,,,,,,,,,there are almost no builders available.............the cost of everything has risen over time,,,,,,,ie materials and labour......apart from those builders like beechwood, who build whole suburbs out in the bush.........like buying a house at safeway prices..... so firstly find a builder who can do the job say in less than a year and find your block of land in the inner suburbs if you can,,,,,,,,,then get some idea of what it would cost to build that modest house...........it may cost more than the established house.......and you have the frustrations of getting it built in time........ friend just pulled down their old house in armadale vic.they had paid 12,000 in 1970..........the land value is now worth a million.......they got a builder, had to wait 1 year for him to start.........estimated cost 660,000 and 12 months to build....which has blown out....now running 10 months late on the job.............they have been renting a house for 20 months...........hoping for a july 08 finish now....... ****home owners need to increase insurance cover to match market value on a regular basis.or you may be under insured if an event happend that needed the house to be replaced cheers