Renovation Cost in Australia (2026)

Why costs rose, and what’s stabilised

Renovation costs in Australia rose sharply between 2021 and 2024, driven by COVID-era supply chain disruption, materials inflation, and a building trades shortage that pushed labour rates up 25–40%. As of early 2026, costs have stabilised but the new baseline sits 30–45% above 2019. Don’t budget against pre-2021 numbers — the renovation market has reset.

What’s happened since:

• Materials are back to single-digit annual inflation. Timber, steel and tiles have stabilised; the 2022–23 shortages are behind us.
• Labour remains the binding constraint. Construction trades shortages haven’t eased — apprenticeships dropped in the late 2010s and the pipeline is still thin. Expect 6–12 week waits to engage a quality builder for anything substantial.
• Energy efficiency requirements (NCC 2025) now mandate higher insulation, glazing performance, and air-tightness on new and substantially renovated work. Real cost: 3–8% added to most renovation budgets but partially offset by lower energy bills.
• Builder failures in 2023–24 (multiple high-profile insolvencies, especially in NSW and VIC) have driven up insurance costs and made owner-builders and small renovators more cautious. Always check builder solvency and home warranty insurance before signing.

Kitchen renovation costs

Kitchens are the most popular single-room renovation in Australia and the most variable on price. Three realistic tiers in 2026:

Budget kitchen — $12,000 to $18,000

• Flat-pack cabinetry (kaboodle, IKEA, Bunnings-tier) in the existing layout.
• Laminate benchtop.
• Basic-tier appliances (cooktop, oven, rangehood, dishwasher).
• Existing plumbing and electrical reused.
• Labour for installation, basic tiling splashback, and minor electrical.

Mid-range kitchen — $25,000 to $45,000

• Custom-built or premium flat-pack cabinetry (laminex, polytec, two-pack on doors).
• 20mm or 40mm engineered stone or porcelain benchtop ($400–$900/m² installed).
• Quality appliances (Bosch, AEG, Miele entry).
• Possible minor layout change — moving the dishwasher, repositioning the rangehood.
• New tiled splashback or premium glass.
• Improved lighting (LED downlights, pendant over island).

Premium kitchen — $60,000+

• Designer-spec custom cabinetry, often two-pack with handle-less drawers.
• Premium benchtop — natural stone, sintered stone, or thick porcelain ($1,200–$2,500/m² installed).
• Integrated high-end appliances (Miele, Gaggenau, Liebherr).
• Full layout reconfiguration with new plumbing, electrical, gas.
• Specialty joinery — butler’s pantry, integrated bins, charging stations.

Bathroom renovation costs

Bathrooms are smaller in scope but punch above their weight on cost because of waterproofing, tiling, plumbing and the dense regulatory environment around wet areas.

Standard bathroom — $15,000 to $22,000

• In-place refresh — same fixture positions, no layout change.
• New tiles (floor and partial walls).
• New vanity, toilet, shower screen.
• Quality but not premium tapware ($300–$700 per outlet).
• Waterproofing redone to AS 3740.

Premium bathroom — $25,000 to $40,000+

• Premium tiles, full-height wall tiling.
• Frameless glass screen, freestanding bath, niche shelving.
• Designer tapware (brushed brass, matte black, $700–$1,500 per outlet).
• Possible layout change with new plumbing rough-in.
• Underfloor heating, heated towel rail.
• Custom vanity with stone top.

Tiling labour alone is $60–$120/m² for floors and walls, with materials on top. A bathroom with 25m² of tiling can absorb $4,000–$5,000 in tiling labour. Waterproofing is not the place to cut corners— it’s legally required, it’s the most common source of subsequent insurance claims, and remediation when it fails costs many multiples of doing it right the first time.

Full house renovation

For a standard three-bedroom house being renovated room-by-room or as a whole-house project, 2026 budgets break down as follows:

• Cosmetic only (paint, flooring, tapware, lighting, minor): $2,000–$2,500/m². Total $80,000–$150,000 for a 50–60m² affected area.
• Mid-range (cosmetic plus kitchen, one bathroom, some replanning): $2,800–$4,500/m². Total $200,000–$400,000.
• Premium (architect-designed, structural work, full re-stack of services, designer finishes): $5,000–$7,500/m²+. Total $400,000–$800,000.

Regional builds are typically 10–20% cheaper than capital city metro in 2026, though the gap narrows in undersupplied regional markets (Cairns, Geelong, Newcastle outer). Sydney is the most expensive city per square metre by a small margin, Melbourne second, then Brisbane, Perth, Adelaide.

Extensions and second storeys

Adding floor area is the most common way to step up a property without selling. Two main approaches:

Ground-floor extension — $3,500–$5,500/m²

Easier and cheaper than going up. New slab or raised floor, new external walls, roof, and tying the extension into the existing services. A 25m² ground-floor extension lands at $90,000–$140,000 for the build, plus design, certification, and any fit-out for the new space (kitchen, bathroom, bedroom).

Second-storey addition — $4,500–$7,000/m²

Considerably more complex. Adds load to the existing structure, usually requires structural reinforcement of the ground floor, scaffold and access costs, and you’ll need to lift the existing roof off. A 60m² second storey (typically two bedrooms and a bathroom) lands at $270,000–$420,000. Some builders won’t take on second-storey adds because of structural risk; specialists are the better approach.

Granny flat — $130,000–$220,000

A separate dwelling on your existing block. State-by-state planning rules vary significantly — read our granny flat guides for the full per-state breakdown. Granny flats often have the best ROI of any renovation because they add rental income (or accommodate aging parents / adult children without buying a second property), and they appeal to the investor buyer pool at sale.

Knock-down rebuild

At some point, renovation becomes worse value than starting fresh. Rough rule: if your projected renovation budget exceeds 70–80% of the cost of a new build, look at knock-down rebuild instead.

• Demolition: $20,000–$45,000 for a typical detached house, more for asbestos remediation or difficult access.
• New build (volume builder): $1,800–$2,800/m² for a project home. A 220m² home lands at $400,000–$600,000.
• New build (custom architect-designed): $3,500–$6,000/m². A 220m² home lands at $750,000–$1.3M.
• Renting elsewhere during the build: 8–14 months of rent, factor it in.

Pre-construction costs

Easy to forget, easy to underestimate. Before any builder turns up, you’ll typically pay:

• Architect or building designer: 8–12% of construction cost for a full service (concept through to documentation and contract admin). Building designers are typically 50–70% of an architect’s fee.
• Structural engineer: $3,000–$8,000 for most projects.
• Soil test: $400–$900.
• Surveyor (boundary, contour): $1,000–$3,000.
• Council application fees: $1,500–$5,000+, escalating with complexity.
• Private certifier: $2,000–$5,000.
• Bushfire / flood reports where applicable: $1,500–$5,000 each.
• Heritage / planning reports where applicable: $2,000–$10,000.

Total pre-construction costs typically run 8–15%of project value. On a $400,000 renovation that’s $32,000–$60,000 spent before any tools come out.

Fixed-price vs cost-plus contracts

The two main contract structures.

Fixed-price (lump sum)

Builder quotes a single total. You pay that, regardless of what it actually costs them to build. Pros: certainty of cost, easier to finance, simpler invoice cycle. Cons: builder bakes in a contingency margin (typically 8–15% on top of expected cost), variations are expensive because each one is a contract amendment, and quality builders may decline if scope is too uncertain.

Cost-plus

You pay the actual cost of materials and trades, plus a fixed builder’s margin (typically 15–20%) and a fixed management fee. Pros: transparency on actual costs, often cheaper if well-managed, better fit for complex jobs and heritage properties. Cons: you carry the cost-overrun risk, harder to finance, requires more active management from the homeowner.

For straightforward renovations under $300K, fixed-price is usually the right call. For complex jobs, heritage properties, or projects where scope will evolve, cost-plus often delivers better value if you trust the builder. Read our fixed vs variable guide (the same principle applies to contract types).

How to finance the work

Four common options:

• Cash / savings. The cheapest financing, no interest cost. Suits cosmetic and small structural work.
• Equity release / top-up loan. Refinance your existing home loan to release equity and use it for renovation. Best for smaller-to-mid renovations where the timeline is short.
• Renovation loan (drawdown loan). A purpose-built product that releases funds in progress payments tied to construction milestones. Better for larger structural work but harder to qualify for, with stricter LVR limits during the build phase.
• Construction loan. Used for knock-down rebuilds and substantial extensions. Interest is charged on progressive drawdowns, principal-and-interest payments don’t start until the build is complete. Most lenders cap LVR at 80% during the build phase, sometimes 90% with LMI.

For anything over $100K, talk to a broker — most lenders price renovation and construction lending very differently, and a broker with construction experience will know which lenders to approach for your specific scope. See our how to choose a mortgage broker guide.

What actually adds value at sale

If your motivation is selling later for more, the ROI is consistently disappointing. Approximate "recover at sale" ratios in 2026 metro markets:

• Cosmetic refresh (paint, flooring, tapware, garden, deep clean): 3× to 10× cost recovered at sale.
• Kitchen renovation (mid-range): 0.6× to 1.2× cost recovered.
• Bathroom renovation: 0.5× to 1.0× cost recovered.
• Granny flat (suburb dependent): 0.8× to 1.4× cost recovered, plus rental income before sale.
• Second storey / extension: 0.7× to 1.0× cost recovered in most suburbs; can exceed 1.0× in high-end suburbs where per-m² value is high.
• Pool: 0.4× to 0.8× cost recovered.

Renovation pays off when it’s for you to live in. Renovating purely to flip is usually a worse trade than buying a better property in the first place.

How to budget honestly

A defensible renovation budget has five parts:

1. Builder quote (or your trades-by-trade quotes if managing yourself).
2. Pre-construction costs: design, engineering, council, surveys.
3. Contingency: 10–15% baseline, 15–20% for older homes or structural work.
4. Scope creep: 3–7% for the changes of mind you haven’t had yet but will.
5. Holding costs: somewhere to live during the build, storage, double mortgage if relevant.

Add them up. If your quoted price is $300,000, your defensible total budget is closer to $370,000–$410,000. If you can’t fund the upper end of that range without stress, narrow the scope before signing.