Why is renovating expensive in 2022

Why is renovating expensive in 2022

There has been a lot of talk on socials about the cost of materials and trades lately. For example, I read about a person who wanted to refurbish their apartment in Bondi and was quoted $250,000. This was for a kitchen, and two bathrooms, I think. Anyway, the point is that renovating or refurbishing is expensive right now. But good quality trades have always attracted a premium price. So why is renovating expensive in 2022.

Minimum Salary & Cost of Living

I think one of the reasons renovating or refurbishing is so expensive in Australia, is our minimum wage and the cost of living. The cost of living in Australia is not cheap, just look at house prices.. In countries like America the cost of living may be cheaper simply because of the size of the country and population. There is an economy of scale in a large country and due to the market size, prices are more competitive.

But also, there are different labour laws in other countries. Which may make the cost of trade labour cheaper. In America, for example, the minimum wage averages from $7.25 to $14. In Australia the minimum wage is $20.33.

With my clients I always advise that the trade work is only one part of the equation. You also want someone who communicates. Answers the phone when you call and troubleshoots any issues easily. Somone with a solution mindset and provides a warranty on the work.

If you engage with a low-cost trade, there is minimal incentive for good service AND quality work.

Here’s a simple example, my friend received a quote to mow her lawn for $70.00. The work might take just an hour or an hour and a half, including clear up. But there is the cost of time for the trade to travel to and from the house.

There is also the cost of petrol and other materials. So, while $70 may sound expensive for an hour’s work for a person to mow the lawn, there are other costs involved.

Supply Chain & Material Availability

While we live and work in Australia, we operate in a global marketplace. What this means is, whether we like it or not, we are affected by what happens in other parts of the world such China and Ukraine.

Recently I had to choose new tiles for a client’s bathroom because the tile we chose was coming from China and I was advised that China was ‘shut down’ due to COVID. If the Chinese people that manufacture and transport the tiles are in lock down, we can’t get that piece of material.

My tile supplier advised, the clay used to make some tiles was coming from the Ukraine and we all know that nothing is coming out of the Ukraine while they’re at war. And if it, does it will be slow and expensive.

But the Russian Ukrainian conflict is also impacting our cost of living with petrol prices going up and we are still impacted by COVID transport delays and supply issues, not to mention floods.

Perhaps it’s time to rethink our renovations, either wait, take some DIY classes, change the scope of the project, spend more time finding the right trade and manage expectations. I’m not sure if this fully explains why renovating is expensive in 2022 but this may help explaining the costs and issues associated with these types of projects. Good luck.