Why are extension companies so much more expensive than a local builder?

Hi All,

We are planning an extension. Initially we were looking at adding an upper floor so I wanted to go with one of the bigger extension companies because it seems that they specialise in that type of extension. Now because of cost and structural considerations we have decided on a ground floor extension. Since we were dealing with the bigger extension companies we got them to quote. The extension is fairly basic, two large bedrooms and an ensuite for a total extension of around 6 squares (55 m2). The extension companies quotes came in between $150K and $180K so I asked some local builders for a ball park figure for building such an extension and they estimated between $60K and $90K. The extension companies price includes everything including drafting and permits. The local builders said to allow $5K - $10K for drafting and permits. I was really surprised by the price difference. Given that the local builders were just estimating based on my description of the rooms and total area should I take their estimates with a grain of salt or are they likely to be somewhere in the ballpark? Their estimates seem to correspond with the Archicentre cost guide. Is there any downside to going with a local builder over one of the big extension companies? Any advice or suggestions would be appreciated. I expected a small price premium for dealing with the larger companies but I don't want to spend $150K if I can have the same thing for $100K


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