Why Is Home Renovation So Expensive?

melbourne renovation cost saving
Table of Contents
    Add a header to begin generating the table of contents

    When thinking about renovating a home, it's tempting to go overboard and maybe squander money on projects that don't have a large return on investment. However, if you keep these things in mind, you'll be able to avoid going overboard. In addition to the impact on your return on investment (ROI), certain incomplete improvements can actually make your home's current condition worse. When looking to purchase an older property, this is an especially important consideration. Finding a happy medium between your financial constraints and your emotional attachments when it comes to a fixer-upper can be a challenge. If you have an older home or a house that is only a few years old and you want to make some changes, you may find that you need to rethink some of your plans for the renovation.

    There are a lot of really good reasons to renovate your home, such as to improve your quality of life, to increase its market value, or even just to give it a more modern appearance. However, the cost of the renovation is the most significant barrier for the majority of people.

    These are the typical costs that are associated with remodelling, and now we're going to share some insider secrets with you on how to trim a few bucks here and there during your project.

    Reasons Renovating Costs More Than Building From Scratch

    Surprise, surprise!

    When it comes to extending or renovating a building, one of the inconvenient truths is that there are almost always going to be a few surprises along the route, and regrettably, these are almost never pleasant surprises. When you move into a brand-new house, there is little room for surprises to catch you off guard. However, when you renovate an older property, there may be a lot of shocks that may not become apparent until after the work has begun. Updating the electrical work, making structural adjustments, and dealing with waterproofing issues are typical challenges.

    There are typically two ways in which unexpected events result in higher costs. To begin, the builder may include a contingency in their estimate to account for some of these unforeseen costs and expenses. A builder's margin of up to twenty percent may be added on top of the price of the other work if the unexpected occurrences are treated as changes to the contract price as they occur. This means that the additional work and costs may also be subject to an additional builder's margin. It is possible that both of these events will take place in certain circumstances. The actual cost of dealing with unknowns is higher than what has been budgeted for and quoted, and this is the case even after taking into account some of the possibilities in the estimate.

    Cost of correcting previous mistakes

    Your home's likelihood of having already had improvements made to it increases in proportion to the length of time it has been in existence. It's possible that some of that effort is already obvious. However, a significant portion of it is anticipated to be concealed behind the walls, beneath the ground, and above the ceiling; prior to the beginning of the work, there is no way to determine who completed the work or how well it was done because there is no way to tell who did it or where it is located.

    The necessity to repair or improve prior work might add a significant amount of expense to your project, just like the'surprises' that I discussed before in this section. If you are aware that work has been done to your house in the past, you need to be aware that you will need to budget for certain expenditures associated with rectification. An expert builder will be able to point out some of the problem areas for you and provide you advice on the best way to correct them as well as an estimate of the expenditures that will be involved.

    Poor quality documentation

    The quality of your paperwork collection is quite important for the success of your remodelling and expansion projects because it needs to outline the extent of the job. Drawings for a rehabilitation or expansion project will illustrate both the current house and the proposed improvements. This is in contrast to the case with new construction, in which every aspect of the project is original.

    The builder and the tradespeople working on the building need to be able to tell, based on the designs and any supporting paperwork, which components of the building are brand new and which have been there all along. Those components that already exist but are undergoing some sort of alteration, such as being renovated, refitted, refinished, or repainted. When the documentation is of low quality and does not disclose this to the builders, it is more probable that the builders will provide inaccurate or inflated prices. This is due to the fact that builders are more inclined to include a larger contingency in their quotations in order to protect themselves from the possibility of cost overruns, which frequently take place when the job scope is unclear.

    kitchen extension

    Cost of overcoming compromises

    Although the budget is likely to continue to be the primary limiting factor in the design process, one of the primary benefits of constructing a wholly new house is that since you are beginning with a blank slate, there are likely to be less sacrifices required in the architectural plan. The most cost-effective remodels and additions are typically the ones that accept some amount of sacrifice in the layout in order to work within the restrictions of the available budget. This is due to the fact that the expense of overcoming these limitations frequently leads to additional demolition and reorganising of the layout of the current house, both of which are rather expensive, as I said in the previous paragraph.

    Every wall that needs to be removed adds a considerable cost and takes away money that could otherwise be spent on new spaces within the extension. To keep these additional costs under control, during the design stage, you should try to retain as much of the existing layout and structure as possible. Keeping in mind that every wall that needs to be removed adds a cost, you should try to retain as much of the existing layout and structure as possible. An skilled designer should be able to assist you in striking a balance between preserving as much of the home's original character as possible and injecting fresh life and intrigue into the overall design.

    Not thinking about what’s going on outside.

    If your project entails adding on to the house, you will also need to examine how this will affect the outdoor areas surrounding the house. We invest a significant amount of time in carefully examining floor plans and kitchen layouts, but this can sometimes prevent us from paying the level of attention that we ought to pay to the areas that are located outside the home. For instance, retaining walls are frequently forgotten about during the development of the plans, which implies that the builder will be unaware of any necessity to include them in his estimate if they are forgotten. The bad news is that they won't construct themselves, which means that this will become an additional expenditure that you will need to pay for at some point.

    You might also want to consider the cost of refinishing the exterior walls. Rendered surfaces are more popular, and homeowners frequently embrace the opportunity presented by the construction of an addition to generate the entire house and bring it up to date. Again, the cost of rendering and painting the entire house will be significantly higher than the cost of just the new extension; therefore, you will need to communicate your expectations to the builder to ensure that all of the costs are accounted for, and that your budget does not balloon out of control.

    Electrical oversights

    The cost of the electrical work is one example of a category that frequently goes beyond its allotted budget. Builders, unless they are given specific instructions to the contrary, will typically only include in their estimates the very minimum requirements of electrical goods, which may only include one light and one powerpoint per room, unless they are specifically told otherwise. In many cases, there will also be no allowance for light fittings, and all that will be allowed is a batten holder with a globe. In the event that you are unaware of this fact, you will be responsible for the additional costs of additional light points and power points (for which you will be charged on a per-point basis), in addition to the expenses of the actual light fittings.

    To rub salt in the wound, any additional expenses over and above what was stated may additionally draw a builder's margin of up to 20 percent on top of the increased costs. This margin is added on top of the additional costs. Another scenario in which employing an Inclusions Specification will ensure that the bids being created by builders or tradespeople are comprehensive and in line with your expectations is the one in which you are describing the scenario. Once more, being well prepared and informed is essential in order to have an accurate understanding of the expenditures involved.

    How Much Does A Full Home Renovation Cost?

    The total cost of your remodelling is determined by a variety of factors (more on that later). According to Service Seeking, the cost of performing small modifications can be as little as $20,000, while the cost of performing a total transformation can swiftly escalate to more than $300,000. The majority of these costs are attributable to labour, with the procurement of materials coming in as the next most significant expense.

    Factors That Affect The Price Of Your Home Renovation

    The expenses of remodelling can vary widely from project to project due to the fact that no two remodelling projects are ever exactly the same. Listed below are some of the factors that will determine how much it will cost to renovate your house.


    Size is likely one of the factors that contributes the most to the overall significance. The cost of remodelling a studio apartment will be far lower than the cost of renovating a townhouse that has five bedrooms and four bathrooms. The website Renovation Junkies estimates that the typical cost of renovating one square metre is between $2,000 and $4,000.


    There is a financial premium associated with using quality materials; however, you also need to consider how easy they are to maintain and how long they will last.

    When compared to materials that require little to no maintenance, such as brick, a material that is initially more cost effective, such as weatherboard, may end up being more expensive in the long run.

    Renovation Level

    Some renovations entail only slight adjustments, such as updating the fittings or renovating the fixtures. Other restorations involve a complete overhaul. Be prepared to spend more money, though, if you want to fully alter the layout of your home (including the placement of things like electrical outlets and plumbing), as this will require more work.


    Your postcode is one of the factors that can decide how affordable or pricey your makeover will be. One of the most expensive things is labour, which may be broken down into hourly salaries and varies from state to state. According to Canstar, the hourly pricing for renovators can range anywhere from $50 to $85 in the New South Wales area, but in the Queensland region, it can be as low as $50.


    Even within the same city, two separate contractors may provide you with drastically varying price quotes for the same work. Even while it may be tempting to instantly go with the lowest offer, you should think about whether or not it would be worthwhile to spend a little bit more for experience and reputation.


    The remodelling of the kitchen will be the most difficult project in terms of the amount of time required and the labour required per square metre. According to Domain, considering all of the appliances and fittings that you will need to acquire, they will also be the most expensive option for you to consider. This may involve tearing down walls, installing new windows, or altering the flooring in order to create a more open floor plan.

    Cost ranges from $10,000 to $45,000 on average.


    Additionally, bathrooms require a lot of manual labour. The installation of new bathroom fixtures or tiles typically incurs the largest expense. Tiles can be purchased for as little as $15 per square metre or as much as $200 per square metre, as indicated by the price ranges listed on the website of the tiling retailer Discount.

    According to Domain, the prices can range anywhere from $10,000 to $35,000.


    Renovating a bedroom can run you a very small amount of money or a very large amount of money, depending on how simple or elaborate you want it to seem. The cost will go up quite a bit if there is a private bathroom available.

    According to Finder, the average cost of renovating a bedroom is between $2,000 and $35,000.

    Living Room

    Renovating your living room, which is one of the more public and obvious locations in your home, is sure to be an effective way to make an impression on guests.

    According to estimates provided by Home Advisor, the cost to renovate a living room often ranges between $10,000 and $15,000.

    is architect worth it melbourne

    Outdoor Area

    Garden makeovers can run the gamut in terms of complexity and expense, from a simple grass garden to one with a patio, deck, and intricate landscaping.

    According to Hi Pages, the typical cost of making improvements to your garden and adding a deck is between $2,000 and $10,000.

    How To Plan Your Renovation Costs And Budget Like A Pro

    The vast majority of us believe that our current homes would be improved by some kind of upgrade, whether it be a relatively minor one or a major one. Intelligent planning is the key to success in any endeavour, regardless of its scale. You will be armed with all of the knowledge necessary to successfully complete any size makeover thanks to our comprehensive guide that is broken down into three parts.

    Costs and Budgeting

    Never spend more on a piece of real estate than what it would fetch on the open market, unless you're swimming in cash. Simple. (Well, in theory, at any rate!) Determine what you are capable of paying for. How to do it:

    Determine the most you are willing to spend. A common oversight is to use excessive capitalisation. Your financial commitment will be affected by the following factors:

    1. The condition of your home.
    2. Even if you’re not planning to sell, the potential resale value of your property gives you an understanding of the local market and prevents overcapitalising.
    3. What you paid for the property. Consider its value. What are comparative homes in your area going for? This will give you an indication of how much you can spend and reclaim when you sell. Different thumb rules are applied to the percentage you should spend on renovating: some say 5 per cent, others 10 per cent, and others up to 20 per cent. But it should be based on what you paid for the property and its current condition – if you paid $300,000, but other houses in your street of a similar size are selling for $600,000, you could spend $200,000 or more (depending on the profit you want to make on resale). But if you paid $590,000 for it, you’d probably be wise not to spend even $30,000.

    Renovate to meet the expectations of the customers you intend to attract in the future. You don't need everything in your wonderful home to be top of the line if it's likely going to be purchased by a couple who are taking their first step onto the property ladder. This is because they won't be able to afford to pay the cost of everything in their offer. Instead, it would be more sensible to do a restoration of a moderate nature. Consider a pre-assembled set rather than a bespoke one.

    Determine the goals that you wish to accomplish. Take some time to jot down all of the potential additions to your home that you could make throughout the makeover. Write next to each item whether you believe it is Important to Have, Nice to Have, or Unnecessary to Have in your opinion. This will assist you in organising your priorities.

    Common Mistakes Of Renovating

    It is time for you to make a decision now that you are aware of some of the benefits and drawbacks of doing the work yourself versus hiring a professional contractor, as well as certain instances in which you might choose one over the other. No matter which way you ultimately decide to go, the hard work has just begun. As you get started on your home improvement project, you should take care to avoid making these frequent blunders.

    Not sticking to the budget.

    This is something that can happen whether you do it yourself or hire a professional contractor. Create a budget before starting work on your project. You might want to add a little bit of padding to your ideal amount, but you should work hard to make sure that items don't end up costing more than your budget allows for.

    Before beginning a do-it-yourself renovation project, it is important to calculate all of the associated expenditures. That includes the equipment, the materials, the paint, and anything else that you might require.

    On the other side, a professional contractor might try to upsell you by offering to remove the carpet from the living room and the bedrooms after refinishing the hardwood floors in a few areas, for instance. They might do this in order to make more money off of the job. Maintain your resolve and do not let yourself be talked into something that is not in your financial plan.

    Not knowing who you’re hiring.

    Consider one of the most significant purchases you've ever made. You didn't just go with the one that came up initially, did you, by any chance? Of course not. You did extensive research on your available choices, including looking into the specifics and analysing the many benefits and drawbacks of each alternative. Repeat steps 1 and 2 for any professional contractors that you are interested in hiring.

    You should look at the websites of the potential contractors you choose and search online for reviews of their work. Creating an account on a website such as Nextdoor can provide you with valuable word-of-mouth recommendations, and the majority of users on such websites are typically happy to share information with their neighbours. It is also not a bad idea to make direct contact with the contractors. Obtain a sense of their working manner, listen to a quote, and ask any queries that are still outstanding.

    Overestimating or underestimating the scope of work

    Both of these can end up being expensive for their own unique reasons. If you overestimate the amount of time and materials required for a do-it-yourself job, for example, you can wind up buying supplies that you don't actually require, causing you to spend more money than was necessary. If you, on the other hand, grossly underestimate the amount of labour necessary for a professional renovation, you will most likely be in for an unpleasant awakening when you look at the final invoice.

    It is possible to underestimate the amount of work involved in a do-it-yourself project. You might believe that you have everything you require for a wonderful weekend restoration project, but then you remember that you'll need a few extra equipment for the job. If the hardware store has already closed, then the completion of that task will have to be postponed until either the next week or the weekend after that. And if the room you're working on is rendered unusable as a result of your efforts, then that brings an additional layer of difficulty into your daily existence.

    Losing track of your vision

    If you’re working with a contractor, you should lay out your expectations for the project. However, if things get delayed or altered, you might end up having a conversation with them about the best path forward. Their vision may differ from yours, so try to stick with what you had in mind as best as you can.

    Conversely, a DIY project can quickly turn sideways. Bigger isn’t always better, and what started as a simple fix could end up looking completely different if you allow yourself to get off track.

    Home renovations are thrilling and a significant step in any homeowner’s journey. Just make sure you’re doing the research (including the right home insurance for the new additions) and considering the pros and cons before making your decision. That will make the result all the more rewarding.

    FAQs About Home Renovation

    Top 4 Most Expensive Renovations for New HomeOwners

    • Building an in-ground pool. Landscaping projects can already vary in pricing wildly, but when you add an in-ground pool to the mix, the price can get even more expensive. 
    • Remodelling your kitchen. 
    • Renovating your bathroom. 
    • Replacing your roof.

    After all, the idea behind the renovation is that much of the existing structure can be retained, while with new construction, everything has to be built. In theory, this is true. Renovation projects cost less compared to new construction.

    If you're looking for a true fixer-upper, you'll likely pay less than you would for a new home. And if you do the renovations yourself, you can save thousands of dollars in the long run, and you'll end up with a great investment.

    Ideally, you should not spend more than 5% of your home's value to renovate it. The most expensive parts of a home renovation are remodelling the kitchen, remodelling the bathroom, replacing the roof, building outdoor areas and adding central heating or an air condition system.

    The 6 Most Valuable Home Improvements

    • Upscale garage door replacement. 
    • Manufactured stone veneer on exterior. 
    • Wood deck addition. 
    • The kitchen (within reason) 
    • Siding and vinyl window replacements. 
    • Bathroom remodel.
    Google Rating
    Based on 24 reviews
    Scroll to Top