Like most things, the cost of renovation in Australia feels like it’s getting more expensive. Inflation across the board is higher than normal, which tends to make the raw materials more expensive, while real wage growth is even higher than inflation at 4.2%, meaning labor costs have also gone up.

But, rather than taking a blanket view of inflation, this article dives into each aspect of renovation and what the costs are in 2024.

Components in construction and renovation

We can break down the costs of undergoing renovation as the foundations of the home, the roofing and exterior (i.e. external rendering), plumbings and electrics, the finishing touches, and the yard.

Recent reports have suggested that the average cost to build a new 150-square-meter house in Australia ranges from AUD 225,000 to AUD 500,000. This equates to AUD 1,500 to just over AUD 3,300 per square meter. But, let’s see where these figures might be coming from…

 Foundations and framework

Assuming the land is taken care of (this can often be the largest expense, particularly nearer the major cities), the house begins with a foundation. These might be concrete slabs, which are often around $4 to $14 per square foot, or a full basement, which is more expensive as it requires deeper excavation, costing more like $20 to $40 per square foot.

If you live in an area at risk of flooding, you may decide it’s worthwhile pitching the home up off the floor. Foundations with crawl spaces are around $6 to $20 per square foot, while pier foundations are cheaper.

Foundational work is typically around 50% labor costs, 50% materials. Concrete is often a big part of the job, and this is currently around $100 per square meter in 2024, while concrete labor rates are around $68 per hour. 

Roofing and exterior 

If it’s a renovation project, re-doing the foundation is unlikely. However, roofing is very important, and this is often where your money will first go.

The cost of a new roof can depend greatly on the materials and location of the home. In 2024, concrete tiles are around $50 per square meter while slated tiles can range from $230 to $320.

What many people are currently upgrading to are solar roofing tiles, which are around $270 per square meter.

Melbourne is the most expensive place to install a new roof, with the total cost being around $115 per square meter, while Brisbane and Perth are closer to $75, but can be as low as $50.

Plumbing and electrics

Plumbing and electrics are often two areas that people do not want to mess around with themselves, particularly the latter as it can be dangerous. However, it’s often cheaper to hire your own plumber directly when purchasing from a bathroom store, as these stores can use expensive contractors. For example, a plumber who works quickly at $70 per hour may be considerably cheaper.

According to economist Thomas Devitt, the average price of a bathroom renovation went up by 25% in 2021 from $21,000 to $26,000 a year later, and is likely even higher in 2024.

Electricians are some of the most expensive tradesmen, costing around $75 to $130 per hour depending on the area. Rewiring a house can be around $1,000, but it heavily depends on the complexity and accessibility.

Interior design and finishing

Interior design and finishing is where money can be saved if you’re interested in taking a DIY approach. The recycling and second-hand market has never been stronger in Australia, meaning that it’s possible to pick up items for cheap and put together a style of your own.

A lot of the retail inflation can be reflected in prices for these everyday items when brand new. TLC interiors estimate around $20,000 in 2024 for furnishing a four-bedroom home, in part because of big-ticket items like a sofa.

Landscaping

Landscaping labor can often be cheaper than other trades, though it can vary. In 2024, patios and decking can cost around $200 per meter squared or $40-75 for paving. Many are tempted to do the landscaping themselves because it’s less dangerous and more accessible. However, given the hard work and that it’s relatively cheaper than other jobs, your time may be better spent shopping for bargains or learning basic plumbing.

Overall costs

BMT Quantity Surveyors have a comprehensive guide to the price of building a house, which covers the different types of build (brick veneer or weatherboard?), and the level of finish. In general, there’s very little you can get for under $2,000 per square meter besides a basic 2-bed home with a low level of finish. Generally, you’re looking at $2,500 on average.

Of course, these do not deduct the work that’s already been done; a renovation is often just a portion of this, though it can often be a surprisingly significant proportion. For a bathroom, you’re looking at closer to $30,000 in 2024, while fully furnishing and landscaping are two areas to save money and will vary greatly on the level of finish you want.

Hidden costs and the nature of quotes

The most important consideration is that quotes aren’t always the final price. Many things go wrong within construction. Perhaps the architect made some misjudgements that a structural engineer needed to correct after agreeing on a renovation cost, for example. To avoid surprises, try and ensure you have all the necessary permissions ahead of time, and get various quotes (not only to gauge the best price, but for a second and third opinion on what the project may entail).

The scope of the project often creeps up, which is why it’s worth considering what you can do yourself. For example, when re-doing a bathroom, you may not be able to tile the new room, but you can probably pull the old tiles off yourself. 

Ultimately, you can perform regular reviews and request detailed contracts, but you want to ensure there is contingency money when (not if) something goes astray.

Can you use a home loan for renovation?

If you’re struggling to gather enough funds for both the project and contingency, it’s possible to use a home loan. It’s not only possible, but it’s often the best way forward due to the low APR, long payback terms, and large amount available. A home loan finder can provide a quick estimate of the costs involved.

This could be through refinancing your mortgage to release equity or through home equity loans. Both are likely to be cheaper than personal loans, in part because the home remains a security for the debt, making the risk very low for the lender.

With both materials and wages relatively high, it has never been more expensive to renovate a home in Australia than in 2024. The many supply problems, global conflicts, and pandemic have caused spikes in material costs. For many, a home loan will be the go-to option for financing the project. However, labor costs can match material costs depending on the project, so ensure you have a detailed contract of the project’s scope, and consider finding ways to cut those hours down with some DIY on the garden, stripping the rooms, and furnishing.