I said earlier this year that unknown cost is one of the biggest reasons a homeowner doesn't pick up the phone. Not because the number would necessarily scare them off, but because not knowing it at all feels like stepping into something with no floor and no ceiling. So let's take the mystery out of where the money in a renovation or new build actually goes.
I want to be upfront about something before I go further: I'm not going to give you a dollar figure in this piece, and if anyone offers you a confident number before understanding your block, your brief and your household, treat it with real caution. What I can give you is the shape of the budget, so the eventual number makes sense rather than landing as a shock.
The budget has more categories than most people expect
When homeowners picture a renovation budget, they're usually picturing the build itself, the trades, the materials, the labour. That's the largest category, but it's rarely the only significant one.
Design and professional fees. Architecture, engineering, and often other consultants depending on the project's complexity. This is the thinking that determines whether the build phase goes smoothly or turns into a series of expensive on-site decisions.
Council and statutory costs. Planning and building permits, and depending on your site, potentially other approvals. These vary by council and project, and they're easy to underestimate if you haven't budgeted for them from the start.
The build itself. Structure, services, fit-out, finishes. This is genuinely the largest line item, and it's also the one with the widest range, because it depends entirely on scope, finish level, and site conditions.
Contingency. A properly budgeted project sets aside a real contingency for the unexpected, particularly on renovations of existing homes, where what's uncovered once walls come off can't be fully known until it's uncovered. Skipping this isn't saving money, it's deferring a decision about how you'll handle a surprise you haven't had yet.
The things people forget. Temporary accommodation if you can't stay in the home during works, furniture and styling once it's finished, landscaping if the build disturbs the garden. None of these are optional if they apply to your project, and none of them are usually front of mind when someone first starts imagining the outcome.
Why the range is wide, and why that's honest, not evasive
Ask five people what a renovation costs and you'll get five different answers, and that's not because anyone's being cagey. Cost depends on scope, finish level, site conditions, structural findings, and current trade and material pricing, which shifts. A architect-led project on a straightforward block with a mid-range finish level sits in a genuinely different bracket from a complex extension on a difficult site finished to a high-end standard. Both are entirely legitimate projects. They're just not the same number.
This is exactly why I'm cautious about anyone who gives you a confident figure in a first conversation, before understanding your block, your brief or your household's priorities. A real budget comes from real thinking, not a rule of thumb applied to your postcode.
How to actually get a real number
The honest process looks like this. You start with a clear sense of what you want the finished home to do for your household, which shapes the scope. That scope, tested against your specific block and its constraints, starts to define a realistic range rather than a single figure. As the design develops and decisions firm up, materials, finishes, structural approach, that range narrows toward an actual number you can plan around.
This is precisely what a feasibility study is designed to do early, before you've committed to drawings or a builder. It's a fixed-cost first step, three meetings including workshop sessions to understand what matters to your household, that gives you a realistic sense of scope and probable cost for your specific project, so you can make a genuinely informed decision about whether to proceed, adjust the brief, or hold off, before the bigger costs are on the table.
The real question isn't "what does it cost"
It's "what does it cost to get what I actually need", which is a different question entirely, and one that can't be answered honestly without understanding your household, your block and your priorities first. That's not a way of avoiding the money conversation. It's how you have it properly, instead of anchoring to a number that was never really about your project in the first place.
If not knowing the number has been the thing holding you back, get in touch to book a feasibility consultation and we'll start turning that unknown into a real, grounded picture.
Mark MacInnis is a Melbourne architect based in the city's south-east, working with homeowners across Brighton, Malvern East, North Melbourne and the surrounding suburbs on renovations, extensions and dual-occupancy projects. His work has been featured in The Age and Best Houses Australia.