Renovating your Melbourne home is one of the most significant financial
decisions you’ll make. Get the budget right and you’ll enjoy a
transformed space and strong equity gain. Get it wrong and you’ll face
cost blowouts, compromised design, or a project that stalls halfway
through.
Here’s the most comprehensive guide to renovation costs in Melbourne
for 2025, broken down by scope, room type, and quality level.
Why Melbourne Renovation Costs Have Risen
Melbourne renovation costs increased significantly in 2021–2023 due to
post-COVID construction inflation, material shortages, and labour
constraints. While the rate of increase has moderated in 2024–2025,
costs remain 20–35% higher than pre-COVID levels. Budget accordingly.
Renovation Cost by Scope
———————– —————— —————— ——————-
Scope Budget Mid-Range Premium
Kitchen (full)** $20K–$35K $35K–$70K $70K–$200K+
Bathroom (full)** $15K–$25K $25K–$50K $50K–$120K+
Laundry** $5K–$12K $12K–$25K $25K–$60K
Extension (per sqm)** $2,500–$3,500 $3,500–$5,000 $5,000–$8,000+
Full house reno $100K–$200K $200K–$400K $400K–$800K+
(avg)**
———————– —————— —————— ——————-
Hidden Costs That Blow Budgets
Asbestos removal: $3,000–$30,000 (common in pre-1987 Melbourne
homes). Structural work (unexpected wall removal, underpinning):
$5,000–$50,000. Re-wiring: $8,000–$25,000 for full rewire.
Re-plumbing: $10,000–$30,000. Planning permit: $3,000–$15,000
including consultant fees. Soil testing (before extensions):
$1,500–$5,000. Unforeseen subfloor or roof conditions:
$5,000–$30,000.
*Our rule of thumb: always add a 15–20% contingency to your
renovation budget. In older Melbourne homes, it should be 20–25%.
This isn’t pessimism — it’s professionalism.*
What Adds the Most Value in Melbourne?
In Melbourne’s market, the renovations with the strongest return on
investment are: kitchen renovation (often 80–100% ROI), bathroom
renovation (70–90% ROI), adding a bedroom via extension or conversion
(strong ROI in family-focused suburbs), adding a second bathroom to a
1-bathroom home (very high ROI), and improving street appeal (new
facade, landscaping, driveway).
How to Control Renovation Costs
Fix the scope before you fix the price. Every change after construction
begins costs significantly more than the same change made at the design
stage. Appoint an experienced architectural designer to produce detailed
construction drawings before tendering. Get at least three builder
quotes. Include a PC (provisional cost) sum in your contract for items
not yet selected. Stage the renovation if necessary to manage cash flow.
Frequently Asked Questions
Do I need an architect to renovate my home?
For small renovations (kitchen update, bathroom replacement), an
architect is not required. For structural work, extensions, or anything
requiring a planning or building permit, architectural drawings are
essential. At IDS, we provide design and documentation services tailored
to the scope of your project.
How long does a full house renovation take in Melbourne?
Design and permits: 3–6 months. Construction: 3–9 months depending on
scope. Total: 6–18 months. Living in the home during construction
significantly extends the timeline due to reduced work access.
Should I renovate or knock down and rebuild?
The break-even point in most Melbourne suburbs is around $400,000 in
renovation cost. If you’re spending more than that to comprehensively
renovate an old house, a knockdown rebuild often delivers better value,
energy efficiency, and design quality.
Ready to Get Started? Contact Integral Design Solutions today for
expert house renovation design and project management services in
Melbourne and Victoria. Visit integraldesignsolutions.com.au/ or call
us to book a free consultation.
