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

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

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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.

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

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 which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

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.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Emma joined Savings.com.au as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).

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