They could see the potential in the large, northwest-facing sloping site and hired architectural designer Richard Furze to come up with a home that made the most of it. All that remains of the original home are floorboards. The new house is more than twice its size.
One feature they did keep was the wide central hall between the front entrance and the living areas at the back. Off this are four roomy bedrooms, all with plenty of storage; the master bedroom has a walk-through wardrobe that leads to an en suite.
The living area is the home's piece de resistance. Large and open it has a soaring ceiling, hard-wearing bamboo floor, and features a designer kitchen with a granite benchtop and striking tiled wall. The unusual sculpted tiles were sourced in New Zealand by interior designer Alaine Ingle, who helped with decor throughout the house.
The kitchen has a butler's pantry. There's also a small study next to the dining area which is closed off with cavity sliders.
For lighting in the living areas, Colin chose a state-of-the art system with a variety of settings, from cool and warm to sunset and moonlight.
"I just couldn't help myself," he smiles.
Bifold doors open to a partially covered deck that gets all-day sun.
Downstairs is a large room, with an en suite, which could be a fifth bedroom, second lounge or home office. The laundry and huge double garage are also on this level, plus a large storage cupboard and workshop.
"One thing we are not short of is space," says Colin.
Like the house, the back garden has undergone a huge transformation. A large parking area at the end of the drive - ideal for boats and other toys - is the roof of a sleepout which is cleverly incorporated into the sloping site.
The sleepout, home to Colin's son, Tom, is a stylish concrete building with a living room, kitchenette, bathroom and large bedroom with walk-in wardrobe. Its wall of glass doors overlooks the bottom of the garden, with lots of trees that line a creek.
Colin and Lorelle have lived in the house for a year and love it, but with another son, Matty, about to leave home, the house will be too big for the two of them.