Don’t forget about details unique to you

While it’s great to have a rough idea of how much your reno might cost, the actual cost can depend on a range of factors.

For example, recent Suncorp Bank lending data* found that average home renovation costs varied greatly depending on location. While the Australian average was $63,118, renovations for households in Victoria were on average $71,067 and in Western Australia were $54,377.

It’s also important to budget according to your house’s structure.

“The style of house being renovated can have a significant impact on price,” says Kieran.

“For example, houses typical to Queensland are built pre-1946. They’re all timber and there is a much larger labour component for these houses versus renovating a house built 20 years ago.”

Make sure your budget is bulletproof

It pays to understand financials when renovating.

Although estimates from experienced builders are usually accurate, your budget will need a buffer. It’s not always clear how big this backup fund should be, though.

“We advise that a contingency of around 3% of the contract value is required,” Kieran says. “This help covers unforeseen or latent conditions, such as finding rotten timber or hitting rock in the earthworks stage.”

If you want peace of mind, it’s worth saving a little bit more – particularly if your home is several decades old.

“When renovating older homes you have to expect that there will be a few anomalies that appear,” says Kieran.

Small rooms don’t mean small costs

Assumptions can be a costly mistake. Even renovating small bathrooms can surpass the cost of large dining and lounge areas. This is because renovations are less about area and more about materials and workmanship.

“For a bathroom there are typically eight to ten different trades required to complete the work,” Kieran said.

This also doesn’t factor in the large variety of different materials required, including sheeting, tiling, tapware, vanities and showerscreens.

On the other hand, renovating bedrooms and living rooms won’t involve trades like plumbing, waterproofing and tiling. Because revamping these rooms requires fewer tradespeople, even large examples can have a relatively small impact on your overall budget.  

Slow and steady doesn’t win the race

A popular way homeowners look to stretch small budgets is by focusing on single rooms. While taking it slow might make sense on paper, Kieran doesn’t recommend renovating one room at a time.

“It’s better to have everything completed at once,” he says. “This way, you’re getting economy of scale with trades so they’re not making multiple visits to site and increasing costs.

“It also means all furniture and belongings can be packed up once, so there’s less household stress caused by living through constant renovation.”

Waiting can also work to increase your costs in more unexpected ways.

“Building costs are always going up. In the next 6 months we’re expecting a price increase of somewhere between 10 and 20% for all carpentry-based materials.”

Custom work is rarely budget-friendly

Custom work might look great, but it can quickly eat through your finances. If you’re on a budget and want to lower costs, it can be worth looking into off-the-shelf options.

“We see a lot of drawings where custom cabinetry has been specified for every bedroom, study and even linen cupboard,” Kieran says.

“There can be much more cost effective items, such as an Ikea setup or a simple wardrobe, that work just as well.”

Talk to a lender about financing

Renovations may be expensive, but they can also be an investment. By updating now, you might improve the value of your property considerably when it comes time to sell.

If you’re looking to carry out renovations, a Suncorp Bank home lending specialist can help you decide what financing options could be right for you. All consultations are 100% obligation-free.

Talk to a home loan expert

Published  8 September 2022

*Data retrieved from July 2019 to June 2020 **This tool is hosted and operated by RP Data Pty Ltd, trading as CoreLogic Asia Pacific (CoreLogic). Your address is used to determine location factors that influence renovation costs. Costs such as wages and materials are varied according to postcode. Estimated renovation costs are indicative only and do not represent Suncorp-Metway Limited ABN 66 010 831 722 AFSL No 229882 Australian Credit Licence 229882 ("Suncorp Bank") making an offer of credit or providing loan approval. Suncorp Bank does not accept any legal responsibility for any loss incurred as a result of reliance upon this tool - please make your own enquiries.

^^Discounted rate is only available for new Personal/Owner Occupied or Investment loans taken out as part of the Suncorp Bank Green Upgrades Equity Home Loan Offer. Existing lending ≥$150,000 and new equity lending between $10,000-$25,000 and borrowings ≤80% of the security property value (LVR) inclusive of lenders mortgage insurance (if applicable), with Principal and Interest repayments. The discounted rate (currently 5.82% p.a) is calculated by subtracting a discount of 2.83% from the Standard Back to Basics Variable Rate (currently 8.65% p.a.) for Owner Occupied Loans, or by subtracting a discount of 3.25% from the Standard Back to Basics Variable Rate (currently 9.07% p.a.) for Investment Loans. Rates and discounts are subject to change and may be varied if the loan purpose or repayment type is changed. Pre-approvals excluded. The discounted rate is available on eligible loans applied for from 17 November 2023 until 28 February 2025 unless withdrawn earlier.