IS NOW THE RIGHT TIME TO RENOVATE YOUR HOME?
If you’ve been dreaming about a home renovation but waiting for the stars to align before you start (and by stars we mean interest rates, construction costs AND a budget that somehow stretches to that perfect aged brass tapware and those hand-rendered green tiles you’ve already mentally installed 🤯 ) we have some news for you.
They probably won’t.
Because when it comes to renovating, there’s rarely a perfect time to start.
Property prices will rise and fall. There will always be something happening in the economy that makes you wonder whether you should hold off for another six months.
So, with interest rates back in the headlines and construction costs continuing to climb, is 2026 a good time to renovate?
The short answer? It can be.
The longer, more useful answer is that the “right” time to renovate has much less to do with picking the perfect economic moment and much more to do with whether the numbers, the property and the project stack up for you.
And judging by the latest figures, plenty of Australians have decided they do.
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AUSTRALIANS ARE STILL SPENDING BIG ON THEIR HOMES
New analysis from KPMG Australia shows home renovation spending increased by almost 5% in the past year, reaching a whopping $56.2 billion.
Renovations, officially called Alterations & Additions by the Australian Bureau of Statistics, accounted for 37% of all Australian housing spending in 2025-26.
That’s below the pandemic peak of around 40%, but still well above the levels we were seeing before COVID.
In other words, our national renovation obsession has most definitely NOT left the building.
At the same time, investment in new builds has increased 20% over the past four years, while spending on one-for-one knock-down rebuilds has fallen 32%.
Australians are still spending serious money on their homes. But when you’re making an investment this big, how you spend that money matters.
Good planning upfront can be the difference between creating the home you actually want and watching your budget disappear into a long list of changes, compromises and things you didn’t see coming.
It’s something we bang on about a lot in Reno School, and for good reason. The decisions you make before the build starts can have a huge impact on what happens once it does.
WHY IMPROVE INSTEAD OF MOVE?
Because sometimes the best house for you is the one you already own.
You might love your street. Your kids might be settled in their school. You might have great neighbours, a brilliant block, beautiful established trees or an older house packed with character that would be impossible to recreate from scratch.
The problem might simply be that the house itself no longer works.
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Perhaps your family has grown. You need another bedroom. Your kitchen is stuck in another decade. Your living spaces are dark and disconnected. Or you’ve spent approximately 4,762 mornings wondering why somebody decided that was the perfect place for the laundry door.
Then there’s the cost of moving.
Stamp duty alone can add tens of thousands of dollars to the price of changing homes, before you add selling fees, conveyancing, removalists and all the other costs that come with buying and selling.
That’s a lot of money to spend before you’ve improved a single thing.
For many homeowners, it makes sense to at least explore what that money could achieve if it were invested back into the property they already own and the location they already love.
LET’S TALK ABOUT THE ELEPHANT IN THE BEAUTIFULLY RENOVATED ROOM: COST
There’s no point pretending construction has suddenly become cheap.
It hasn’t.
According to the Australian Bureau of Statistics Producer Price Index data, house construction prices increased 5.9% nationally in the 12 months to June 2026, with labour and material costs continuing to put pressure on building prices.
And for most of us, a major home renovation will be one of the largest investments we ever make, second only perhaps to buying the house itself.
So you REALLY want to get it right.
That means understanding the process before you start. What needs to happen first? Who do you need on your team? What approvals might you need? When should you engage a builder? When do selections need to be made? And which costs have you forgotten to put in the budget?
If all of this sounds overwhelming, we can help. Our Ultimate Budget Bundle includes a Renovation Roadmap, Budget Template and Budget Blowout Tips to help you plan your renovation confidently.
AND YES, INTEREST RATES MATTER
If you’re borrowing money to fund your project, interest rates absolutely need to be part of the conversation.
Higher rates can affect borrowing capacity, repayments and ultimately how much you feel comfortable spending.
But rates move.
Rather than basing a major decision on what they’re doing at one particular moment, the more important question is whether your household can comfortably afford the project, including a healthy contingency, if circumstances change.
Because improving your home should improve your life. Not have you breaking into a cold sweat every time your banking app sends a notification.
If budget is the thing keeping you awake at night, don’t miss our cheat sheet on 30 Ways to Save On Your Renovation. Because finding out halfway through the build that you’ve dramatically underestimated your costs is nobody’s idea of a good time. 😬
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RENOVATE OR RELOCATE?
This is where it pays to do the maths.
Start by working out what it would cost to transform your current home into one that works for you. Then compare that with what it would really cost to move, including the purchase price of an equivalent home, stamp duty, selling costs, conveyancing, removalists and potentially a larger mortgage.
And remember, the new house may not be perfect either.
You could spend all that money moving and STILL find yourself staring at the kitchen thinking, “Yep, that’s gotta go.” 😬
We LOVE a transformation, but even we’ll admit that keeping the existing house isn’t always the right answer.
If the structure is fundamentally wrong for what you’re trying to achieve, requires enormous work or there’s very little worth retaining, knocking down and rebuilding may make more financial and practical sense. Changing planning rules in some areas are also creating new opportunities for duplexes and higher-density development.
The key is to properly investigate all three options before committing to one. Look at your property, your goals and the real numbers behind renovating, relocating and rebuilding.
Because the right answer isn’t always the most obvious one.
SO… SHOULD YOU DO IT NOW, OR WAIT?
Here’s the question we’d ask instead:
What exactly are you waiting for?
If the finances don’t work yet, wait.
If you need more savings, borrowing capacity or contingency, wait.
If you haven’t figured out what your family actually needs, investigated planning restrictions or established a realistic home renovation budget, use that time to do your homework.
But if you’re waiting for construction costs to tumble, interest rates to become perfectly predictable and the property market to send you a handwritten invitation saying NOW IS YOUR MOMENT…
… You could be waiting a while.
There is no universally perfect year to renovate.
There is, however, such a thing as being properly prepared to renovate.
And that’s a VERY different thing.
5 THINGS TO DO BEFORE YOU START
1. WORK OUT YOUR REAL RENOVATION BUDGET
Not your dream number. Work out what you can genuinely afford, including professional fees, approvals, selections and a healthy contingency.
2. GET CLEAR ON THE WHY
More space? Better flow? Another bedroom? A house that works for teenagers instead of toddlers? Define the problem before designing the solution.
3. UNDERSTAND THE PROCESS
Get clear on the steps, approvals and people you’ll need before you start spending serious money.
4. PRIORITISE RUTHLESSLY
Separate your must-haves from your nice-to-haves. If renovation costs need to come down later, you’ll already know what stays and what can go.
5. PLAN. PLAN. THEN PLAN SOME MORE.
Even if you’re not ready to renovate for another year or two, start doing the work now.
Create your vision. Understand your budget. Learn about approvals. Work through your floorplan. Investigate builders. Research materials and selections.
Planning does not mean you have to start building tomorrow.
It means that when your right time arrives, you’re ready for it.
THE BOTTOM LINE
Don’t try to perfectly time the market.
Time your project to your life, your finances and your home.
Because if your house no longer works for the way you live, you have the financial capacity to change it and you’ve done the work to understand exactly what you’re getting into, that might just be your right time.
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And if you want some help getting properly prepared, that’s exactly what Reno School is for.
We take you through the process step by step, from creating your vision and understanding your floorplan to budgeting, selections and planning, so you can make better decisions before the dust starts flying.
Because when you’re making one of the biggest investments of your life, you don’t want to wing it.
