How much does a renovation really cost?
Updated: 6 hours ago
When people talk about their renovation budget, they're often referring to the amount they expect to spend with the builder.
But the building contract is only one part of the total project cost.
A realistic renovation budget also needs to consider professional fees, approvals, site and existing-building costs, contingency and expenses that may sit outside the building contract.
Understanding these costs early gives you a much better basis for deciding what you can realistically afford to build.
1. Building works
Construction will usually be the largest component of your renovation budget.
The cost will depend on the size and complexity of the project, the extent of work to the existing house, structural changes, level of finish and site conditions.
You may see renovation costs expressed as a rate per square metre. While this can be useful as a broad starting point, $/m² rates can be misleading for renovations.
A relatively small extension might also involve removing walls, restructuring part of the existing house, replacing a kitchen, altering the roof and upgrading services. These costs aren't necessarily proportional to the amount of new floor area being added.
For early budgeting, it's therefore important to consider what is actually being changed, not just how many square metres are being added.
2. Site and existing-building costs
Renovating an existing house introduces conditions that may not be fully understood until work begins.
Depending on the property, additional costs might include:
demolition and removal
raising an existing house
excavation and retaining walls
difficult site access
structural strengthening
asbestos or other hazardous materials
stormwater and drainage works
alterations to sewer, water or other services
upgrading existing electrical or plumbing installations.
These costs can be particularly significant when renovating older Brisbane homes or working on steep or constrained sites.
The more that can be understood about the existing property before construction, the better the basis for establishing a realistic budget.
3. Contingency
Every renovation budget should include a contingency.
Existing buildings inevitably contain some uncertainty. Conditions concealed behind walls, beneath floors or within existing structures may only become apparent once construction begins.
A contingency provides a financial allowance for these unforeseen circumstances and for other adjustments that may arise as the project progresses.
Importantly: Contingency isn't money you intend to spend. It's money you should have available if the project requires it.
The appropriate allowance will depend on the nature of the project and how much uncertainty remains within the existing building.
4. Architects and other consultants
Professional fees also form part of the total project budget.
Depending on the project, these may include services from:
architect
structural engineer
building certifier
surveyor
town planner
hydraulic engineer
energy assessor
quantity surveyor
other specialist consultants.
Not every project requires every consultant. The services needed will depend on the site, proposed work and approval requirements.
Architectural fees can also vary considerably depending on the complexity of the project and the scope of services required.
5. Approvals and statutory costs
Planning and construction can also involve costs payable to councils, certifiers and other authorities.
These might include planning application fees, building approval fees, searches, certificates and other authority charges.
Individually these costs may be relatively small compared with the building contract, but they should still be included when establishing the overall project budget.
6. Costs outside the building contract
Some expenses associated with completing a renovation may not form part of either the architectural fees or the builder's contract.
Depending on your project, these could include:
landscaping
swimming pool works
furniture
appliances
window furnishings
security screens
moving and storage
temporary accommodation
finance costs
other owner-supplied items.
It's worth identifying these costs early rather than discovering towards the end of the project that they haven't been allowed for.
Think about the total project budget
Rather than starting with a construction figure alone, it can be useful to think about your renovation budget this way:
Building works
+ Site & existing-building costs
+ Construction contingency
+ Architect & consultant fees
+ Approvals & statutory costs
+ Other project costs
= TOTAL PROJECT BUDGET
For example, having $600,000 available for a renovation doesn't necessarily mean you have $600,000 available to spend with the builder.
Once the other costs associated with delivering the project are allowed for, the amount available for construction may be considerably less.
Understanding that distinction at the beginning can prevent one of the most common problems in residential projects: developing a design around a construction budget that doesn't reflect the total amount available to complete the project.
How much should you spend on the renovation?
Cost is only one part of the equation.
It's also worth considering the value of the existing property, how long you intend to live there, what the completed home will provide and whether the proposed investment makes sense compared with alternatives.
For some homeowners, a substantial renovation provides exactly the home they want in a location they don't want to leave. For others, investigating the numbers may raise the question of whether rebuilding or moving should also be considered.
Build your own renovation budget
We've developed a Renovation Project Budget Calculator to help you bring the different project costs together.
The spreadsheet allows you to enter and adjust allowances for construction, site-related work, contingency, professional fees, approvals and other project expenses to establish an indicative total project budget.
You can also work backwards from the total amount you have available to get a better understanding of how much may realistically be available for the building works.
→REQUEST A RENOVATION PROJECT BUDGET CALCULATOR
What can you achieve with your budget?
An early budget is a starting point, not a construction quotation. The next question is how that budget relates to your particular house, site and requirements.
Our Project Definition process progressively considers the property, brief, design and budget together before significant investment is made in detailed design and documentation.
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