What suburb and state of Australia are you in?
Consult real estate agents regarding the conservative resale prices of the different scenarios.
That is their profession. It may help with the correct decision.

start with Council to find out if it's possible to subdivide or build a duplex or dual occupancy or ? and how much land would be lost with a driveway to the rear block if you could subdivide? i have seen lightweight buildings moved but unless the building has significant architectural value by the time you strip out all the asbestos (probably inside as well as outside) and replace all the stumps and plumbing etc it would probably be cheaper and easier to recycle anything worthwhile and build something new and better designed on a slab

My gut feeling is that a 2 bed fibrolite rectangle would cost as much to move as it is worth ( without being rude , no much ) . To then reclad would add more $$$ . Another factor would probably be your distance from the house movers depot -- if they drive 500kms each way to move a house 40 metres it will obviously cost a lot more than them driving 6km from their depot .

Here in NZ , some older larger 'classic' inner city houses are sold for $1 or similar , because a larger central city section could be worth $1 million or more , and then moved ( sometimes 100's of kms ) to relatively cheap lifestyle or remoter beachside properties and done up .

Meanwhile , the central city site gets 4 or 6 or sometimes more , 3 storey , 3 or 4 bedroom apartments built , each sold for $1 million plus .

But a 2 bedroom fibro 'cottage' would just be demolished -- yes , a different situation to yours I know , but basically would it increase the end value more than the cost , OR is there a sentimental or similar reason why you'd want to keep it ?

Are u planning to build second house in same style then maybe. You would need to get a quote, But if you are doing a grander second house then keeping the original unless it has a lot of visual charm will devalue new house

Thanks everyone. Seems like the consensus is to demolish.

I like the style of the house (classic beach house). But it doesn’t have particular architectural merit, or too much sentimentality. Block is in Rye, Victoria. I was planning to sell the other half as land, so house design would be up to new owners. Current house is in keeping with the setting and lots of surrounding houses, so I don’t think that it devalues anything else.

Get the move and Reno costed first in that case

I don't know your situation obviously, but you would make more of a profit by selling a home than a land, and you would control what build get done next to yours. Just a thought.

Thank you.

Is it that clear cut that building and selling (taking into account costs/hassle/time) would be more profitable than selling the land?

have you investigated the subdivision.. , legal restrictions and fees, which block would you keep, is it big enough for what you want to build, what is the minimum size would each block would have to be, what amount could you expect to receive from the sale after fees, what space does the new driveway use? a small block at the front and bigger block at the back would waste less space on a driveway or is the block wide enough to subdivide lengthways without a driveway..you said the small house is "in the middle" but have you made a properly sized site plan to show exactly where it is ..my brother subdivided his block with an Lshaped boundary to allow for an existing house..lots of questions that need answering before you can make the best decision but in the end do you want to have a house on a small block with such a close neighbour when you already have a big block.?

Thank you- yes, I have a lot of homework to do- am only in the early stages of investigating and just thinking about the option. Unfortunately it will have to be a front/rear split - the block is wide enough for driveway access but not wide enough to have two side by side. Dividing the block still leaves two reasonable sized plots with less garden maintainence and money freed up for either Reno/ new build/ landscaping etc. Not sure yet if I would take the front or rear block or perhaps neither and sell both.

Last year, the median price of constructing a single-family home was ' $289,415, or $103 per square foot' ( just googled that!)

How much does a brand new house cost in your area? ( taking into account the economic climate we are in)

Pitch the two numbers against each other and you will know if it's worth your time.

Additionally if you are already building your own home, doing another one at the same time will not be that much more of an hassle!

Thanks Kristy - does your 10k include re establishing it on its new site, and if not, have you had quotes for that?

It includes landing it on the new stumps. Our quotes for stumps were approx 2500k. But this is in regional SA....things could be different out here!