According to Suncorp Bank, the average home renovation cost in Australia is $63,118.
This price can go up or down based on the project’s complications, type of renovation, and location. For example, houses with standard cookie-cutter designs are cheaper than those with elaborate architectural styles. Also, the average price in Victoria, $71,067, is different in Queensland, at $60,560.
As for the house areas to renovate, the following is the breakdown of the average cost in Australia.
- Kitchen: $26,000
- Decking: $12,000
- Bathroom: $22,000
How Do These Prices Drive Homeowners Mad?
As you would have noticed, the cost of home renovation in Australia is expensive.
It can have a significant mental impact on homeowners because they may not have enough money to spend on the renovation. Some fall into the pitfalls where they have to stop the renovation, pay a massive amount of debt, and live in a house with more issues than before, leaving them depressed, stressed, and frustrated.
But if you know how to budget for your home renovation, you can avoid this.
How to Budget and Save Money for Your Home Renovation?
Just budgeting is not enough. What you need to know is to budget and save the right way, and here’s how to do it:
Save.
We don’t live in a fairy tale where dwarfs and fairies maintain a house for free with a touch of a wand or spell.
We live in the real world where termites eat wood for a meal, weather can destroy a home, and chubby babies grow up. Life situations demand you to make home changes, like it or not. It is only fitting that you keep at least 1% of your salary for home improvements the next time you receive your paycheck.
Find a source of financing.
If you want to make a significant renovation, it will cost you a lot of money.
We don’t like getting into debt, but there are instances when you don’t have a choice but get a loan. For example, if a typhoon destroys your home and you don’t have enough savings for repair or if your house is uninsured, you’ll need a loan.
You can ask for a loan from many private institutions, but make sure they are registered. Use this option only as a last resort to avoid more significant problems.
Hire an insurance repair builder.
If you want a house renovation to have your home repaired from a calamity and your house is insured, you don’t have a problem.
But make sure to hire a building company that provides insurance repair services. If you do it, your insurance company will handle the renovation expenses, even labour costs. You don’t have to worry about paying anything, not even a cent. You’ll be good as long as the price of the materials and labours are within the limits of your insurance coverage.
Plan where to splurge and where to save.
Planning is the key to success in a home renovation.
In a renovation project, expect that there’ll be areas that you’d like to highlight more than others. Identify these big-ticket items and figure out whether to splurge on them or not. Note that you don’t have to buy luxurious materials for quality. Some alternatives are just as good but at a lower cost.
Get multiple quotes and compare prices.
Get at least three quotes from different builders and compare them.
When it comes to home renovation, getting multiple quotes is a must. It allows you to compare prices and see which one gives you the best value for your money.
Have a contingency fund.
Besides the budget for the renovation itself, make sure to have extra money set aside, around 10% of the project cost.
Having this fund is crucial. It allows you to have an emergency fund to spend for mistakes, accidents, or changes during the renovation. It ensures that you will not run out of money, which can cause your renovations to halt.
Disclose your budget to your contractor.
Your contractor will help maximise your budget.
We know that not all contractors are reliable. But if you’re going to hire one, choose a builder you can trust with this info. Your investment is at stake here, and your builder will adjust their plans and materials based on the budget you told them you have. Therefore, you should be honest about how much money you have.
For more information on the average cost of home renovation in Australia, read: How Much Does a Renovation Cost in Sydney?
