Average renovation costs $86,000 less than minimum $150k HomeBuilder criteria

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on September 25, 2020
Average renovation costs $86,000 less than minimum $150k HomeBuilder criteria

Photo by Roselyn Tirado on Unsplash

With home renovations on the rise, new data reveals the average Aussie is spending $63,000 on their reno - over $86,000 shy of the minimum $150k spend needed to qualify for HomeBuilder.

New data from Suncorp Bank reveals homeowners looking to renovate are loaning on average $63,188 to fund their renovation project. 

This is $86,812 less than the minimum $150,000 you need to spend on your home renovation to qualify for the federal government's controversial HomeBuilder package.

To be eligible for the scheme, you must be on an income of less than $200,000 for couples, and $125,000 for singles, and be spending between $150,000 and $750,000 on a renovation for a home that has been previously valued at less than $1.5 million.

The HomeBuilder package has previously come under fire for being a 'handout for the wealthy' with many arguing that most people don't have $150,000 to spend on a renovation.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Rates correct as of January 26, 2022. View disclaimer.

The data revealed the average renovation cost varied by state, with households in Victoria topping the list, investing over $71,000 for their home renovation, followed by New South Wales at $66,609, and Queensland at $60,560.

Average cost of renovation

State/Territory

 Average Amount

 NSW

 $66,609

 WA

 $54,377

 QLD

 $60,560

 VIC

 $71,067

 TAS

 $67,416

 SA

 $53,524

 ACT

 $58,466

Australia

 $63,118

Mitch Picklington from Mitcon Build in Brisbane said business has been booming as a result of the HomeBuilder scheme.

“We have been inundated with requests to quote for different jobs around Brisbane at the moment, whether it’s renovating one room in the house or making plans for a larger scale renovation to utilise the government’s Home Builder scheme," Picklington said.

"We’ve seen a surge in people wanting to expand their current living areas with an extension and refresh their outdoor entertainment area by adding a pergola, deck or even swimming pool.”

Aussies pouring money into home renos instead of holidays

Ruined travel plans as a result of COVID-19 have seen many Australians spend money they would have spent on a holiday on home renovation projects instead.

Angie Brown from Randwick, New South Wales said the money she was going to spend on travelling later this year has been put into improving her apartment instead.

“My role working in the retail industry was impacted early on however although restrictions eased in New South Wales and I was able to return to work, our plans to travel interstate and overseas to visit friends and relatives in the later part of 2020 were no longer on the cards,” Ms Brown said.

“We had always planned to renovate, but COVID-19 and spending more time in our apartment than ever before made us reassess our finances, hastening up our renovation plans.

“It’s been nice to stay busy planning our apartment renovation, talking to our bank and having discussions with local suppliers and builders, and it has given us something to look forward to in a pretty crazy year where things haven’t exactly gone to plan.”

How far will a $60k renovation budget stretch?

According to Suncorp's renovation calculator, a $60,000 renovation budget can stretch quite far, depending on where you live and how extensive you want your renovation to be:

  • Kitchens come in as the most expensive room in the house to renovate, with the average cost of a medium sized kitchen with average fittings to set Australians back on average $20,750, however this price can rise as high as $32,700 if premium fittings are used.
  • Bathrooms will set keen renovators back on average $16,250 while renovators using higher quality materials will spend $21,450.
  • Outside, a double carport will set you back $32,450, while a small deck will cost around $4,300.

Suncorp Executive General Manager Consumer Lending Bruce Rush said renovation costs can vary quite a bit depending on a few factors.

“The cost to renovate can vary slightly depending on the location you live in and subsequent cost of trades, as well as the quality of fixtures or materials used,” Rush said.

“Suncorp’s recently launched renovation calculator can help people understand the costs of different types of renovations whether it’s adding a kitchen, carport, garage or repainting the entire interior of your home.”

Rush said while some Australians are making smaller more affordable changes around the time, others are using the money they would have otherwise spent on holidays for more substantial renovations.

“Many customers are keen to improve the look and feel of their home but don’t know where to start,” Rush said.

“The best way to keep a renovation on track and on budget is to do as much research as you can before getting started. Talking to your bank or broker is a good place to start to ensure you get the right finance for your renovation project.”


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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