Renovation loan demand rose 16% year on year to 30 April, showing interest in renovating remains solid, even as households keep a close eye on how costs may shift in the months ahead, new NAB data shows.
02 June 2026 | 2 min read
2 June 2026
Australians’ appetite for home renovations remains strong, with many homeowners pushing ahead with projects even as global fuel movements start to put some upward pressure on building costs.
Renovation loan demand rose 16% year on year to 30 April, showing interest in renovating remains solid, even as households keep a close eye on how costs may shift in the months ahead, new NAB data shows.
All major states across the country experienced renovation loan growth with Queensland leading the way at 25%, followed by Western Australia (17.9%), South Australia (15%), Victoria (10.8%) and New South Wales (10.7%).
While building and labour costs have come off their recent peaks, NAB economists expect rising fuel prices linked to global tensions could push up renovation costs further, especially for materials and transport.
NAB Executive Home Lending, Denton Pugh, said demand for renovations was continuing, but households should plan carefully as costs may become more volatile.
“We’re still seeing demand for renovations, with lending up 15% in the past month alone, but the risk is costs could begin creeping higher again as fuel prices flow through to building materials and labour,” Mr Pugh said.
“We know many Australians are renovating to make their homes more liveable, whether that’s creating space for a growing family, enabling hybrid work, or improving energy efficiency.
“Renovations remain a great way to add value, but in the current environment it’s important to plan ahead, build in buffers and stay flexible as conditions change.
“Simple steps like locking in quotes early and carefully timing your build can make a real difference to the final cost.”
With costs potentially becoming less predictable again, Mr Pugh encouraged homeowners to pause, review their plans and plan ahead:
Five practical tips to help manage renovation costs:
- Build a buffer into your budget – with costs still shifting, setting aside a 10–20% contingency can help manage unexpected increases.
- Lock in quotes where possible – understanding which costs are fixed and which may move with fuel or supply chains can help avoid surprises.
NAB Executive Denton Pugh
- Plan around available materials – choosing materials that are easier to source can reduce delays and cost blowouts.
- Avoid starting too early – waiting until key materials are on site can prevent costly delays.
- Focus on upgrades that reduce ongoing costs – energy efficient improvements can help lower bills over time.
Builder’s advice: locking in prices now to avoid surprises
Stephen Reddish, owner of Senmak Construction, said he was seeing strong demand for renovations and extensions, as more homeowners chose to improve rather than relocate.
“Our pipeline is full and enquiry levels remain high,” he said.
“While costs have stabilised compared to previous years, we’re starting to see some pressure emerge in areas like fuel, freight and deliveries, which is flowing through to materials such as steel, concrete and PVC.
“I’d encourage renovators to lock in fixed prices where possible and build in a provisional allowance, particularly for items that could move.
“It’s not all doom and gloom. With good planning, clear pricing and the right advice early, homeowners can manage costs and avoid surprises.”
Melbourne family choose renovating over relocating
Chris Godfrey, who has been renovating his Heidelberg Heights home for the past year, said he and his family were mindful of rising costs but committed to seeing the project through.
“We started to outgrow our home, but we love the area, so we decided the best option for us was to renovate.
“We really want this to be our forever home, so we’ve focused on getting the important parts done first and making it work for us long term.
“We’ve definitely had to make some trade-offs to stay on budget, like scaling back some of the finishings and keeping our old couch for a while until we can buy a new one down the track.”
Chris’ advice: “Focus on what matters most and be prepared to compromise on some things so you can keep things moving.”
Notes to editors
- Renovation loans include alterations to houses, restorations and additions including pool, landscaping and fencing.
