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How to plan and budget your renovation

Thinking about renovating but don’t quite know where to start? There’s a lot to consider – especially when it comes to scoping out the project and nailing down the budget. Every renovation is different, so the work you do, how you go about it and the amount you spend is totally dependent on your personal circumstances. But there are a few helpful ways you can work out the best path forward and estimate the costs involved – so let’s dive in.


Setting your budget

When it comes to renovating your dream home, your first need to look at the numbers. There are 2 main questions you’ll need to answer:


  • How much would you like to spend on the renovation?
  • What are your options for financing it?


Whether you have $5,000 or $50,000 to play with – having an estimate of what your reno will cost is essential.


Deciding on an amount to spend

This part of the renovation process can be tricky – and sometimes a bit of a chicken-and-egg situation. You’ll generally have a rough idea of the changes you’d like to make to your home, but whether you can complete the size and scope of the home renovation you’re picturing will depend on what you can afford.


A good place to start is with an overall review of your finances. Do you have savings in the bank? Do you have equity built up in your home that you could tap into? Can you afford increased repayments if you take out a loan? All these factors will play into your budget. Once you’ve done some digging into your finances, you should be able to come up with an approximate amount you can comfortably spend on the upgrades.


This is a really important step. You want to avoid spending time and effort getting quotes for materials and reaching out to tradespeople for your blue-sky vision – only to find out it’s way out of your price range. It’s a better use of your time to work out the amount you can afford to spend and retrospectively fit your renovation elements into your budget.


Financing options

Once you’ve worked out how much you can spend, you may need to borrow money upfront to get the job done. And that’s where your bank could help. There are a few ways to finance your renovation project, depending on the size of the upgrade and your financial situation, including:



Chat to your local Home Finance Manager to find out the best finance option for your situation.


Scoping out the renovation elements and costs

Now that you’ve got a dollar figure in mind – you’ll want to scope out the elements of your reno to work out what each part will cost and how far your money will go.


Come up with a wish list of areas you’re going to tackle. Are you building a deck? Remodeling the bathroom? Creating a home office space? Adding a garage or car port? Make a detailed list of everything that needs to be done per room – and be as specific as possible. From there, you can begin to calculate the costs to find out if they will fit within your budget by searching online or reaching out for quotes.


Each renovation is different, so knowing exactly what to budget for can be difficult – especially if you’re a first-time renovator. Depending on the type of renovation you’re undertaking, here are a few costs that you might need to factor into your budget.


Planning costs

Before you start work on your home renovation, you might need to fork out some cash in the planning stages. If you’re undertaking a larger project, having renovation plans drawn up by an architect or draftsman may be something you need to think about. You might also need pay a fee to your local council to have them approved before you begin – also known as seeking development application (DA) approval.


Save money by taking on the work yourself

In some cases, there might be parts of the renovation you decide to tackle yourself in order to save money. Demolition work, painting and even tiling are somewhat simple tasks that most people can take on to avoid paying a professional and cut costs. Do some research on the types of tasks you think you might be able to handle – your bottom line will thank you for it!


Materials, fixtures and appliances

Whether you or a professional tradesperson completes all or part of the renovation, you’re going to have to think about and budget for all the materials, fixtures and appliances needed to get the job done. Depending on the work, this might include things like:


  • Materials – timber, bricks, carpet, floorboards, tiles
  • Fixtures – tapware, shower screens, light fittings, electrical outlets, freestanding bathtubs
  • Appliances – oven, dishwasher, washing machine, dryer


When it comes to choosing materials, your best bet is to go to showrooms in your local area to get a clear understanding of what's out there in your price range. Before you go, make sure you have an idea of any building specifications that will help you get the most accurate quote for your material costs. For example, knowing how many square metres are needed for carpeted or tiled areas, measurements for your oven or dishwasher and the type of power points you require will help make this process as seamless as possible.


Tip: Keep in mind that budget materials might cost less not be as durable as premium materials. Experts typically recommend buying the best quality materials you can afford on your budget.

Hiring professional tradespeople and labour

There are some jobs that you might consider doing yourself, but it’s definitely worth engaging tradespeople or licensed professionals on more technical or labour-intensive work – especially when it comes to things like complex building work, structural changes, electrical work or new plumbing. It’s a good idea to do your research and get a minimum of three quotes from each trade. Labour costs will make up a significant portion of your budget, so it’s really important to find a tradesperson that does quality work and you can trust to get the job done to a high standard.


Tip: Hiring the pros can help you avoid making costly mistakes – especially if this is your first time renovating or you’re not confident you have the skills to do the work yourself.  

Unexpected costs

Things don’t always go to plan – so you’ll want to build in a 10-20% buffer for any unexpected expenses that might pop up. Renovation costs can blow out, so having this emergency buffer or contingency budget accessible if things go wrong could make a huge difference to your stress levels and financial situation.


Alternate accommodation

If you can’t live in your home while it’s being renovated, you’ll need to figure out if you can afford to rent elsewhere during that time. There is also a number of additional renovation costs that catch some people by surprise, so make sure you consider things like:


  • Demolition work and skip bin hire
  • Rubbish removal
  • Inspection reports
  • Building surveyor fees
  • Asbestos removal
  • Accessing building reports
  • Furniture storage

What does the average renovation cost?

It’s difficult to say exactly how much an average renovation will cost. Remember: every home is different, therefore the approximate costs are going to vary depending on a number of factors. Whether you're thinking about a major renovation or a smaller home improvements, here are a range of average home renovation costs in Australia.


House renovation cost

Minor upgrades to your home can cost as little as $20,000, whereas a larger, full-scale home renovation or remodel can easily go over $300,000. Most of these costs go to labour, while the next biggest expense is sourcing materials. As mentioned, the range for renovation costs is huge, but that’s because no two renovations are ever exactly the same.


Bathroom renovation cost

The average bathroom renovation cost can come in anywhere between $5,000 and $35,000 – depending on how much work you’re doing and the type of fixtures you select. When taking on a bathroom renovation project, you need to have a clear idea of what you're trying to achieve.


Many homeowners choose to save money by painting the current wall tiles instead of removing and relaying them, or just choosing to update tapware and the vanity to refresh the look. On the other end of the spectrum, some renovators might decide to gut the entire room, rework the layout and install brand new fixtures. If you're planning on a more upscale renovation, you might think about adding premium elements like floor heating, frameless shower screens and a freestanding bathtub.


Kitchen renovation cost

You’ve probably heard the saying “kitchens sell houses" – meaning sellers are more likely to purchase a home with a kitchen that catches their eye and ticks all the boxes. Renovators tend to put in a lot of effort to make sure that their kitchen renovation is practical, stylish and modern.


The average kitchen renovation cost in Australia can range anywhere from $10,000 to $50,000 – and is often the biggest expense of the project. You might be considering replacing floorings, windows, or knocking down walls to create an open space layout. New appliances, fittings and cabinetry can also push the cost up.


General renovation planning and budgeting tips

As with any project, making sure everything runs smoothly can sometimes be challenging. Here are our top tips and tricks to save money and keep things on track.


1.      Research all aspects of the renovation thoroughly and be realistic about the true cost

2.      Do it once and do it right – avoid cutting corners and use professionals where appropriate

3.      Try to stick to your budget and timeline as closely as possible

4.      Focus on the areas that will add the most value and avoid overcapitalising

5.      Add 10-20% buffer to your renovation budget for unexpected expenses that might arise


Ready to kick start your reno journey?

Starting a renovation can be overwhelming – but we’re here to help you get prepared. We have a range of home loans to suit your personal circumstances and our specialists can show you how to get where you want to go. For more information on the type of loan that might be right for you to fund your home renovations, get one of our lenders to call you back

Things you should know

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice. Credit provided by Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.

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