The renovation decision: why more Australians are choosing to stay put
- Written by: The Times
The cost of selling one home and buying another is changing the calculation for households that need more space or a different layout. Renovation can make sense, but it is becoming more expensive too.
An Australian family whose home no longer suits them once had a straightforward choice: sell it and buy one that does. Today, they may look at the price of the next home, add the costs of getting there, and decide to build an extra room instead.
The moving bill begins before a buyer is found. There may be repairs, styling and advertising to pay for, followed by an agent’s commission when the property sells. Buying again brings conveyancing, inspections and, for many purchasers, stamp duty. Removal costs and the possibility of carrying two homes for a time add further pressure.
That makes a renovation attractive even when its quoted price is substantial. The household is comparing the cost of building work with the total cost of moving, including expenses that do not buy it a better home.
There is evidence of considerable renovation activity, though the figures require care. The Australian Bureau of Statistics estimates that alterations and additions work done reached almost $4 billion in the March 2026 quarter, up 4.1 per cent from the previous quarter in inflation-adjusted terms and 10.2 per cent from a year earlier. That measures work being carried out. The value of new alterations and additions approved subsequently fell 3.9 per cent in July, so the data do not establish that renovation demand is accelerating continuously.
The tax question needs a distinction
Capital gains tax may matter when an investment property is sold, or when a home does not qualify fully for the main residence exemption. For an owner selling a home that meets the exemption’s conditions, however, the gain is generally exempt. CGT should therefore not be treated as a routine moving cost for every homeowner.
Stamp duty is the more immediate tax hurdle for many people buying their next home. Its effect is particularly visible to an owner who wants to move only a short distance: they may be paying a large transaction cost to exchange one suitable dwelling for another that fits their needs a little better.
The potential consequences extend beyond that household. When owners decide against moving, fewer established homes may come onto the market for other buyers. A growing family can stay in a smaller home; an older owner can stay in a larger one. The dwelling has not disappeared, but opportunities to match homes with changing needs can be lost. That is a possible effect of costly moves, rather than proof that renovations are currently reducing national sales.
Fewer transactions could also mean less stamp duty than states would otherwise collect. It would be wrong, though, to call this an existing revenue collapse. ABS figures show conveyance stamp duties rose 18.3 per cent to $41 billion in 2025–26. Higher property prices can lift the tax collected per sale even when turnover changes.
Renovating has its own price shock
Staying is no cheap escape. A renovation needs available trades, materials, approvals where required, and a budget that can withstand surprises once work begins.
The ABS says input prices for house construction rose 2.1 per cent in the June quarter and 3.8 per cent over the year. It identified higher material, freight and fuel costs among the pressures. Those figures do not measure every renovation quote or establish that every trade price is at a record high, but they show why households should be cautious about assuming that an extension will come in at an old estimate.
The shift creates business for builders, tradespeople and material suppliers. Yet it can also intensify competition for workers and supplies needed to construct new homes. Renovating an existing dwelling usually improves its usefulness for one household; unless it creates an additional dwelling, it does not increase the number of homes available nationally.
The Times View
The question facing many owners is no longer simply whether they can afford a better home. It is whether the improvement is worth the price of selling, buying and moving to it.
For some, renovation will be the sensible answer. For others, its rising cost will make both choices difficult. Australia’s housing debate often counts the homes being built and sold. It should also pay attention to the households staying where they are because changing homes has become too costly.
