If you are planning a full home renovation in Melbourne, you have likely come across estimates ranging from $50,000 to $500,000. That range is not wrong, but it is not useful either, particularly when you are trying to set a realistic budget or secure finance.
The reason the range is so wide is that a full renovation means different things to different homeowners. Updating surfaces and finishes is a fundamentally different project from reconfiguring the layout or extending the footprint of a home. In 2026, the average cost for a comprehensive renovation in Melbourne sits between $2,500 and $4,500 per square metre, but where you land within that range depends almost entirely on what you are changing and how much of it involves structural or wet area work.
To give you something more useful to work with, we have broken the costs down into three tiers based on current Melbourne labour and material rates.
Tier 1: The Cosmetic Refresh
Cost range: $1,500 to $2,500 per square metre
Typical budget for a 4-bedroom home: $30,000 to $80,000
Building permits: Generally, not required
This tier covers everything that updates the look and feel of a home without touching the structure. It is the right approach for investors preparing a property for sale or lease, or for homeowners who are happy with their layout and simply want to modernise the finishes.
Typical scope includes fresh painting throughout, sanding and recoating existing floors or laying new hybrid flooring, replacing kitchen cabinet doors and benchtops while keeping the existing carcasses, and updating bathroom fixtures without retiling. Because no walls are moving and no services are being relocated, permits are generally not required, which also reduces your admin time and fees.
Tier 2: The Structural Open-Plan Renovation
Cost range: $2,500 to $4,500 per square metre
Typical budget for a 4-bedroom home: $80,000 to $200,000+
Building permits: Likely required
This is the most common tier for Melbourne families who love their location but want a home that works differently. The focus is usually on creating open-plan living by removing walls and reconfiguring the kitchen, dining, and living areas into a single connected space.
Typical scope includes removing non-load-bearing walls, a complete rip-out and replacement of kitchens and bathrooms, new double-glazed windows, and upgrading the electrical switchboard to handle modern appliances and heating and cooling systems. Building permits are generally required where structural changes or window alterations are involved, and a registered building surveyor will need to be engaged.
Tier 3: Major Structural Work and Extensions
Cost range: $4,500 to $8,000+ per square metre
Typical budget: $200,000 to $500,000+
Building permits: Mandatory, including engineering and soil tests
This tier is for projects that physically change the footprint or height of the home. It covers ground-floor extensions, second-storey additions, heritage-sensitive renovations, and any work that involves moving load-bearing walls and installing steel beams.
Projects at this level require building and planning permits, engineering computations, and in most cases soil tests. Premium finishes such as natural stone benchtops, custom joinery throughout, and high-specification glazing are common at this tier, and these material costs compound on top of the structural work. It is also the tier where the difference between an experienced builder and an inexperienced one becomes most consequential.
The Costs That Do Not Show Up in a Square Metre Rate
One of the most common reasons renovations run over budget is that the per square metre estimate only covers construction. In Victoria, there are compliance costs that sit alongside it and need to be budgeted separately.
Domestic Building Insurance is mandatory for any project over $16,000 in Victoria. Building surveyor and permit fees typically range from $2,000 to $5,000 or more depending on the project scope and your local council. Victorian regulations now also require 7-star energy ratings on significant renovations, which can mean upgrading insulation or glazing in parts of the home beyond just the new work, adding cost that is easy to overlook at the planning stage.
Strip-out labour and waste removal are two further costs that catch homeowners off guard. Removing existing kitchens, bathrooms, flooring, and linings takes time and generates significant waste, and disposal costs in Victoria have risen considerably over the past two years. These items need to be in your budget before you start, not discovered mid-project.
Why Wet Areas Change Everything
Applying an average cost per square metre across your whole home will give you a misleading number if your renovation is heavy on wet areas. The square metre rate for a bedroom and the square metre rate for a bathroom are not comparable.
A 10 square metre bedroom might cost $5,000 to renovate with new flooring and paint. A 10 square metre bathroom can easily cost $20,000 to $40,000 once waterproofing, tiling, fixtures, plumbing, and electrical work are all accounted for. If your project includes a new kitchen, two bathrooms, an ensuite, and a laundry, your average cost will sit at the higher end of whatever tier you are working within, and budgeting as though it will not be a risk.
A Real Example: Catching the Gap Before It Becomes a Problem
We recently assessed a project for a family in Melbourne with a standard 4-bedroom home. They wanted new floors throughout, a new kitchen, two updated bathrooms, and fresh paint. Their initial budget was $80,000.
When we worked through the full scope, including strip-out labour, waste removal, and the wet area costs, the realistic figure came to $110,000. Rather than presenting that as a problem, we worked through the scope with the client to find a smarter path to the same outcome.
By retaining the laundry layout and choosing semi-custom joinery instead of fully bespoke cabinetry, we brought the project within a range they were comfortable with, without compromising the quality or the finish. That kind of early assessment is exactly what prevents budget blow-outs from happening on site.
A Simple Rule for Budgeting With Confidence
When setting your renovation budget, we recommend thinking in three parts. Roughly 40% should be allocated to materials, the things you can see and touch at the end of the project. Another 40% covers labour and trades, the work that makes the materials function properly and last. The remaining 20% should be held as contingency and fees, covering permits, insurance, and anything unexpected that surfaces once work begins.
The contingency is not a buffer for poor planning. It is a recognition that renovation projects involve existing structures, and existing structures occasionally produce surprises. Having that reserve in place means a surprise becomes a manageable moment rather than a crisis.
Frequently Asked Questions
How long does a full house renovation take in Melbourne?
A cosmetic refresh on a standard 4-bedroom home typically takes four to eight weeks on-site. A structural open-plan renovation generally runs between three and six months. Major extensions or second-storey additions can take six to twelve months or more, depending on the scope and permit timeline. Planning approval adds additional time before any work begins, and this is often underestimated.
Do I need to move out during a renovation?
For a cosmetic refresh, it is often possible to remain in the home, particularly if the work is staged room by room. For a structural renovation involving kitchen and bathroom demolition, most families find it more practical to move out for the duration of the main works. Your project manager should discuss this with you at the planning stage so you can factor accommodation costs into your overall budget if needed.
What adds the most value in a renovation?
Kitchens and bathrooms consistently deliver the strongest return in Melbourne’s property market. Open-plan living conversions also perform well, particularly in older homes where the layout feels disconnected. The caveat is that overcapitalising relative to the street value of the property reduces your return, so understanding the ceiling value of your home before committing to a scope is important.
Want to know what your renovation should realistically cost?
Book a free consultation with our team or visit our Experience Centre in Laverton North to see the quality of our work for yourself.
This article is for general information only. Costs and requirements vary based on your specific site and circumstances. Please consult with the Radevo Living team for a detailed project assessment.
