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How much should I spend on a renovation?

How Much Should you Spend on Home Renovation in Auckland?

We have answers to your renovation & building questions.

You might want to renovate to add value to your home, modernise the space, make it more energy efficient, or just for a change of look. For whatever reason you are deciding to renovate, it all starts with deciding how much you can spend towards the cost of renovating.

Before you get on with your renovation, it helps to have a clear view of the positive aspects of a renovation, and the negative. If you haven’t given these a thought yet, we can help with our thoughts:

Home Renovation Positives:

  • Increase the value of your home. Increase you capital gain
  • Develop the home to your needs and lifestyle
  • Upgrade out-of-date and old fittings and fixtures. as well as doors and windows
  • Improve insulation & double glazing
  • Save on moving costs – why relocate to a new home when you can renovate your home with a smaller investment?
  • Modernise to Improve functionality, save on energy costs, and provide the space you need
  • Higher rental return income  on your investment property
  • According to Westpac, a kitchen or bathroom renovation can return you $1.50 for every dollar you invest

Home Renovation Negatives:

  • Its likely you’ll need to move out during a substantial renovation. If not, then sharing your space(and your bathroom) with tradies may get stressful
  • Having your beloved home looking like a rubbish tip during the building & renovating process
  • Will you be overcapitalising your property?
  • Can you really afford what you are doing?
  • Is the property condition an issue? What issues are behind the walls you cannot see?
  • Will your renovation design, material and colour decisions appeal when you come to sell?

Whether your home is being renovated to suit you or a rental tenant, the added capital value it makes towards the property investment should be a consideration. With these positives and negatives in mind, we can look at how much you should be budgeting on your home renovation.

How Much Does Home Renovation Cost?

The size of your property, condition and the degree of building needed will directly impact the cost of renovating your home. The best way to start working out your budget is listing priority items and dividing this list into ‘must-have’ and ‘nice-to-have’ items.

As an example of must have, if your roof is old and leaking, it should be on your list of must-haves. Vice versa, those expensive bathroom tiles would look fantastic, but if you renovation budget looks tight, then it goes onto the ‘nice-to-have’ list.

The next vital step is to get quotes from different builders to have an accurate viewpoint of the costs involved. Working out how you can compare pricing can also be hard – especially if you have never done a renovation, house extension or new build before. Compare apples with apples –the highest priced quote may have everything included that you asked for, but the lowest price has missed some things out such as scaffolding which may be at an additional expense for you. You can find out more information about comparing building costs here. 

Once you’ve gone through the quotes that are in keeping with your planned scope of works, most expert home renovators recommend adding another 10% to 20% contingency to create a buffer for unknown or surprise elements, which are common even during the most comprehensively planned renovation projects. So if the average quote cost sits around $20,000, you should budget an additional $2,000 to $4,000 as a contingency.

As a basic guide, you can use the market value of your property as a starting point for you home renovation cost calculation. As a general guide, the amount you spend on your home renovation should not be more than 10% of the CV of your home. For example, the average price of a house in Auckland is around $1 million according to Realestate.co.nz. For a million dollar home in Auckland, the renovation budget should ideally be $100,000 or less.

Here’s what homeowners can expect to pay in home renovation costs for an average-sized Auckland home.

  • Bathroom: A full bathroom renovation typically costs about $18,000 + gst and upwards depending on what the clients wants and needs are. A tiled frameless shower and bathroom upgrade starts at $28,000 + gst.
  • Kitchen: The average cost of a basic kitchen renovation is $20,000 + gst. If a kitchen only needs minor upgrades like updating a benchtop, doors and hardware, renovations should start at around $10,000 + gst. A full strip out and start again can reach more than $80,000, depending on the quality of materials and appliances installed.
  • New roof: If you have an old iron roof that’s rusting, a new one will cost you around $50,000+ gst depending on a variety of factors such as height, type, design and size.
  • New flooring: You might want to spruce up your home renovation with new carpet. Carpet costs $50 -$100 per square meter on average + laying. Installing new solid wood floors will cost $120 + gst per square meter and only goes upwards depending on quality, colour and type + installation. Laminate, which is less expensive, will set you back anywhere from $15+ gst per square meter to $150 + gst per square meter + installation.
  • Electrical upgrades: The average kiwi home for modern living generally needs an electrical upgrade. Expect a switch board upgrade, more power outlets, better lighting in the kitchen and bathroom and if its an older home a rewire. Electrical upgrades generally start around $3000 + gst and go upwards. House rewire for the average size home start at around $9000 + gst.
  • Recladding: Any great villa remodel includes the builder fixing up the old rotten weatherboards. Putting new weatherboards on your home runs to an average of $30,000 + gst.
  • Paint: With health & safety rules, you’ll likely need to scaffold around the home, so an interior/exterior paint could start at $30000 +gst
  • Asbestos report. Under the current legislation, any renovation to a home built pre 2000 requires an asbestos report before works can start. This will cost $500 + gst upwards. More information here
  • Architect & Council Costs: Many renovations in Auckland require a council consent. To obtain a consent you’ll need architectural drawings. These cost on average $7000 to $12000 + gst

 Budget for landscaping

Landscaping often gets forgotten, but it increases curb appeal and therefore value in the home. Its no pleasure looking at uncut lawns, but enjoying a daily coffee appreciating your landscaped back yard can be priceless. Don’t underestimate the cost as it’s very labour intensive and can be expensive. Try to plan for major outdoor earthworks at the same time as reno excavations to provide machinery access.

Budgeting for Structural vs. Cosmetic Renovation

A full structural renovation where you remove walls and increase the building  footprint will cost you several times more than a cosmetic renovation where you work within the walls you have.  In some cases, the 10% value of the home budget  for renovating may not always apply. Some property experts estimate that full structural renovations could cost up to or over 40% of the value of your home.

With that in mind, if your classic 1900’s villa in Auckland is worth $2 Million, a fully-finished structural renovation could set you back by as much as $800,000. This could include moving load bearing walls to create space, fixing exterior rotten cladding, changing the roof lines, opening walls onto gardens, upgrading all the interior space for modern living & lifestyles, changing the interior layout, all new electrical, installing insulation, sanding and varnishing floors, installing all new double glazed windows and French doors for better functionality, the cost of architect, builder and Council consents and fees, the list goes on.

By contrast, a simple cosmetic renovation like giving your house a fresh coat of paint or  upgrading  fittings & fixtures in your bathroom or kitchen, should cost you no more than 1% to 5% of the value of your home. If you are think about a quick way to add value before renting or selling your home, cosmetic renovations are a great choice.

If there’s one thing to always remember; it’s speak to the experts before starting any renovation job! Talk to Auckland Builders & Renovations Ltd

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