Renovation prices skyrocket in NSW

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A shortage of tradespeople combined with the impact of a cooling property market has resulted in a sharp jump in renovation costs in one state.

According to online portal Service Seeking, which allows people to find and compare the price and services of tradespeople when looking to carry out a renovation, renovation costs at the end of the December 2015 quarter were 8.11% higher than compared to the same period in 2014. 

According to Service Seeking’s latest Renovation Consumer Price Index (RCPI), the December Quarter increase means the average cost for tradesperson for a renovation project in NSW is now $64.09 per hour.

THE RCPI analysed 52,000 quotes across 10 renovation sectors submitted through the Service Seeker portal during the quarter.

The increase in NSW is well above the national increase of just 1.48% and makes the state the second most expensive location to renovate in after Western Australia.

Jeremy Levitt, chief executive officer of Service Seeking said the size of the cost increase in NSW came as a surprise.

“It was a bit of surprising result. Queensland and Western Australia have historically been expensive places to renovate in because of a shortage of tradesmen, but New South Wales has really leapt ahead with them right now,” Levitt said.

“We’re seeing more demand at the moment. The market in New South Wales and in particular Sydney is cooling of now and people are looking for ways to add value to their home. There is a bit of a shortage of tradies in New South Wales at moment which is also helping the price increase,” Levitt said.

The RCPI claims the average hourly cost of a renovation in Western Australia is $65.03, while in Queensland it is $62.09

According to the RCPI, the NSW increase was driven by price rises for carpentry (26.26%), tiling and paving (21.87%) and building work (18.48%) and Levitt said prices are likely to stay high for the near future.

“We’re anticipating prices will be pretty consistent in New South Wales for the next quarter or so as the market continues to cool.

“Right now of the major states, Victoria is the cheapest to renovate in. Its market hasn’t boomed and then cooled of like New South Wales has, so there’s not as much demand at the moment.”

Service Seeking’s RCPI puts the average hourly cost of a renovation in Victoria at $58.91.

With the price of renovations in NSW so high, professional renovator Cherie Barber said people need to ensure they are have their projects planned out before renovating.

“A lot of people are just clueless when it comes to renovating. You do need to be educated and organised when carrying out a renovation,” Barber said.

“When it comes to dealing with tradies you need to make sure you set out clearly what the scope of work is and make sure you don’t get ripped off there. Even simple things like not having all the fixtures on site from day one and then you end up having to take 20 trips to Bunnings ends up costing you,” she said.

“You need to make sure you’re thinking like somebody who will want to buy or rent the house. Something as simple as a coat of paint can really increase the value of a property, but people often get that wrong by picking a colour they like, rather than one that will appeal to buyers and renters.”
 

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