Nothing wrong with Terrace or Semi D lot as long at good location and good price. The smallest or ugly looking house is the best location trumps the biggest/posh house in poor location, as some property guru says.
It is possible to built from
You mean budget for standard instead of posh? Can still do some interesting things with standard budget.

Construction cost, if you are getting a contractor to do for standard single house RM250/ft2 - RM300/ft2.
High end single house RM300/ft2 - 400/ft2.
Assuming it is terrace house 1600-2000ft2, thus about 400k to 500k. (this is construction cost alone, excluding consultants fee, permit, finance charges etc.)
If you buy material yourself, you can save some money.
It is possible to demolish and rebuilt the house, as long you get professional consultant input, neighbour's consent and permit from the local authority.
Just that:
1) It can be tricky because of adjoining neighbour's structure. Your works may damage your neighbour's (eg. crack or water leak). If yours is already damaged then all good to rebuilt.
2) Lose 1 feet space, because you need to do new structure, not use back the structure shared with neighbour.