This is a very complex question, as families have become attached to a particular home once they've been living there few a years. Your particular property starts to feel like home, as you have got to know the area and all the local enmities with in it. The children by now feel secure and very happy in their school and will have lots of friends in the locality.
Now to counter balance this argument, the size of your current property may not be big enough to add on the square footage now required. The option of moving out while the renovation work is being carried out may not be financially viable. Are you willing and able to live with the builders for the time required to complete the renovating of your home.
Moving to a complete new location can afford you the opportunity to change your lifestyle. If you are thinking of moving out of the city to the countryside, you can buy a larger house, and maybe acquire so land or both for about the same amount of money as you'll receive from the sale of your existing home.
If you have lived in your particular home for the past five to 10 years, the property will have increased in value, very substantially. By renovating your current home to a very high standard, you will most likely a profit of either hundreds or even thousands of Euros all depending the particular build.