The knock-down trend that’s splitting suburban blocks in two 

With the nation in the midst of a housing supply shortage, it can seem like a step backwards to bulldoze an existing home.  

In fact, most often in Australia, demolished housing makes way for new housing, in a process known as a “knock-down rebuild”. 

Traditionally, this is usually thought of as an individual homeowner razing the current house to make way for a new one. The old dwelling might have been structurally unsound, unsuited to the homeowner’s needs, or more work to repair than renovate. 

But that’s just one type of knock-down rebuild, and it’s known as a “one-to-one”. At a moment when the nation is desperately trying to increase the supply of housing across the country, and skilled tradespeople to build those new homes are in short supply, it’s understandable that they can appear to be doing little for the nation’s housing woes. 

According to new data from the Australian Bureau of Statistics, however, only about half – or 58.2% – of the homes that are demolished in Australia for new housing are replaced by another single occupancy home. The rest make way for two or more homes to be built. 

Between July 2019 and June 2025, a total of 55,692 homes were demolished in order to build another single-family dwelling.

The second most common type of knock-down rebuild was when two homes are built on a block that otherwise housed one, with 25,480 projects approved over the period.  

Rebuilds comprising three homes made up 5,904 projects during the six-year span, while 8,367 projects were classified as “other” – the majority of these are instances in which homes are demolished to make way for apartment buildings. 

Overall, 19.2% of the total dwellings approved across Australia between 2019 and 2025 were knock-down rebuild projects, and the number of new homes produced in the wake of demolition of a single home averaged at 2.1.

Understanding the rebuild rate 

Apartment construction can largely be attributed for the reason that demolition of a single home appears to result in twice as many dwellings once construction is complete. 

That’s because for every knock-down-rebuild where a detached home makes way for an apartment building, the rebuild rate balloons to 9.5. 

For townhome projects, one knock-down results on average in three new homes. 

But when it comes to detached home approvals from knock-down rebuilds – where a single home is replaced by other standalone homes – the knock-down rate sits at 1.3. Ultimately, when detached housing is replaced by other single-family homes, the outcome is unlikely to do much towards increasing density on that land, or add more stock to the market. 

Knock-down-rebuilds, therefore, mostly contribute to the increasing housing supply when single-family homes are demolished to make way for a very different type of housing – either townhomes or apartment buildings. 

The knock-down rebuild ring 

What is interesting is that whether it’s one-to-one rebuilds or higher-density conversions, knock-down rebuild projects tend to be most popular in one specific area: the middle-city ring. 

This is best witnessed in the capitals of the states where the most knock-down rebuilds occur: NSW and Victoria. (NSW approved 77,279 dwellings as a result of knock-down rebuilds between July 2019 and June 2025. Victoria approved 70,570). 

Across Sydney and Melbourne, the areas that attracted the highest number of knock-down rebuild projects tended to be established areas just outside of the most populated, inner-city suburbs.  

In Sydney for example, suburbs like Revesby, Ryde and Arncliffe saw some of the highest numbers of dwellings approved from knock-down rebuilds. In Melbourne, this occurred in and around suburbs like Preston, Baybrook and Altona. 

Why so much attention on the middle ring? It’s because these suburbs are home to the properties that are most attractive for knock-down rebuild projects. These are established areas that are made up of older homes that might be in need of substantial renovation. Importantly, they are not where you find most of the city’s heritage or traditional character homes, which buyers will often go to more lengths to preserve.

They also boast a level of proximity to the city, making them ripe for increased density (from developers) or the connectivity that single-family builders who aren’t willing to live in farther-out, new estates desire. 

Are you interested in learning more about knock-down rebuilds? Check out our dedicated New Homes section.

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