Should you renovate in Melbourne while the market is slow?

By Barbara Yerondais
Oct 02, 2026

Answering: Should you renovate a Melbourne home while the market is slow, and what does a fixed-fee architect actually protect in that decision?

Estimated reading time: 12 min read

Yes, renovate in Melbourne while the market is slow if you plan to live with the result for years and the work fixes how the house actually functions, because a slow sale market has not made building cheaper. Input prices for house construction in Melbourne rose 3.5% in the year to June 2026, according to the Australian Bureau of Statistics, while Victorian dwelling prices eased for a second straight quarter. Barbara Yerondais, a fixed-fee renovation and extension architect with 35+ years in practice, prices each renovation at feasibility and fixes the design fee from day one. That fee is the one cost you can lock today, and her staged method settles the scope on paper before any builder prices it.

You have the builder’s card on the fridge and a folder of saved rooms that no longer match how the house works on a school morning. Sale prices in your street look soft, so every quote feels like a bet you could lose twice: once on the build, and again if you ever sell. So the project stays in the folder, and another winter passes in a house that does not fit.

Wait too long and the family lives another year in the wrong house while construction inputs keep moving. Move too fast on a loose brief or an open-ended design fee, and a soft resale market makes every unnecessary dollar feel permanent.

Key Insights

  • A slow sale market and a cheap building market are different things. ABS figures show Melbourne house construction input prices up 2.0% in the June 2026 quarter, while the mean Victorian dwelling price fell over the same quarter.
  • Renovate for the years you will live in the house. Resale maths matters most to owners who expect to sell soon.
  • Under Victoria’s Architects Code, an architect’s fees and costs must not exceed the fee structure in the signed client agreement. A fixed fee turns that structure into one number.
  • A fixed design fee does not fix the builder’s price. Named selections, few provisional sums and variations agreed in writing protect that side of the budget.
  • The builder prices the build. Barbara Yerondais works out what the house and the budget will hold before anyone draws, and the first step is a free, no-obligation call with her.
Protection What it holds steady What it leaves open Where the rule sits
Fixed architect’s fee The design fee for a defined scope, agreed in writing before work starts The builder’s price, planning outcomes and any scope you change later Architects Code, through the Architects Registration Board of Victoria
Major domestic building contract The agreed contract price and terms, in writing, for what the drawings and selections actually describe Prime cost items, provisional sums and variations Required for most building work over $10,000 (Consumer Affairs Victoria guidance)
Home Warranty insurance Cover for eligible claims about incomplete, defective or non-compliant work, before, during and after the build The price itself, and work outside the scheme’s terms Victoria’s Home Warranty scheme, for contracts signed from 1 July 2026 worth more than $20,000 (Consumer Affairs Victoria guidance)

Table of Contents

What a slow market makes cheaper, and what it does not

A slow market shows up first in sale prices. The ABS Total Value of Dwellings release for the June 2026 quarter put the mean price of a Victorian dwelling at about $918,400, down from $938,000 in March and $952,800 in December 2025. Renovation approvals dipped too: nationally, the value of approved alterations and additions fell 2.1% in August 2026, to $1.28 billion.

Building costs tell a different story. The ABS Producer Price Indexes show input prices for house construction in Melbourne rose 2.0% in the June 2026 quarter and 3.5% over the year. That index tracks the price of materials that go into a house; labour and builders’ margins move separately. On materials, at least, the soft sale market has not made building cheaper.

That gap shapes the decision in three ways:

  • Waiting has a price of its own. If input prices keep rising, the same scope can cost more next year, and the house still fails you in the meantime.
  • A quieter pipeline may help, without promising anything. Builders can be easier to reach when approvals ease, but no national figure guarantees a discount on your job.
  • The money you control is spent before construction. The design fee, the scope and the precision of the drawings are all decided before a builder quotes.

Step 1: Decide how long you will live with the result

Before any numbers, answer one question: how long will you live in this house once the work is done? The answer decides how much the sale market should weigh on you.

Our view is simple. If you expect to sell within a few years, resale value is a fair test, and in a soft market a renovation that outruns the street can sting. If you expect to stay ten years or more, this spring’s sale price matters far less than whether the house works on every ordinary day you live in it: the kitchen where everyone collides at 7.30am, the missing bedroom. Over-capitalising is a resale worry. For a long stay, the sharper test is what a house that fits costs you per year of living in it.

  • Write down your realistic stay, in years.
  • List what fails in the house now, room by room.
  • Split the list into what this stage must fix and what can wait.

If your real question is whether to sell at all, see our framework on whether to renovate this house or move; if the structure itself is in doubt, our guide to renovating or knocking down a post-war Melbourne home covers that call.

Step 2: Fix the design fee while the scope is still yours

The design fee is the first money you spend, and in a slow market it is the easiest to let drift. A percentage fee moves with the build cost, and an hourly fee moves with every extra meeting. Our guide to what fixed-fee architecture buys you compares the models in detail. While construction inputs are still climbing, a fee tied to the build cost climbs with them.

Whichever model you choose, Victorian law sets a floor. The Architects Registration Board of Victoria says an architect must not collect a fee for work without a written and signed agreement, and must not provide services, including concept designs, sketches or reports, without one.

  • The agreement must explain how fees are calculated and when they may change.
  • You receive the proposed agreement at least 7 business days before you are asked to sign it.
  • Under clause 7 of the Code, fees and costs must not exceed the agreed fee structure.

A fixed fee turns that structure into one figure. Barbara Yerondais’s staged fixed-fee method prices the work at feasibility, fixes the fee from day one and starts with schematic design, so you never pay to document a scope you have not settled. The fee is fixed to a defined scope: change the brief substantially and the agreement sets out how the fee changes, which is why the scope comes first.

Step 3: Make the budget stretch on paper

A budget stretches furthest on paper, where changes are cheapest. Three moves do most of the work.

See what the budget achieves beside what the dream costs. In Barbara Yerondais’s staged engagement, after schematic design, you see two options side by side: what your budget achieves, and what the full wish list would cost. The items between the two become a shopping list you choose from, so the scope is your decision before a builder prices it.

Look inside the footprint first. Our Altona project began as a 1960s triple-fronted brick veneer house with a growing family and a modest budget. Rather than a full demolition, the design enclosed an underused rear patio as the new living and dining room, lit by clerestory windows, and turned the original living room into a fourth bedroom with an ensuite. Three bedrooms and one bathroom became four and two, mostly within space the family already owned.

Name your selections before the contract. Most renovation work over $10,000 needs a major domestic building contract. Consumer Affairs Victoria advises owners to write the make, model, colour and style of prime cost items into that contract, and where possible not to agree to provisional sums, because they can make the final cost higher. Every allowance left open is a price someone sets later, and any variation must be agreed in writing on a Variation Notice.

For domestic building contracts signed from 1 July 2026, Home Warranty insurance covers homes up to three storeys where the contract is worth more than $20,000, and claims can be made even while the builder is still trading. It covers faulty or unfinished work; the price is still set by the drawings and the contract.

Step 4: Test the decision in one conversation

You do not need a design contract to find out whether renovating now makes sense. Start with a free, no-obligation call: Barbara rings you herself to talk it through. If it looks like a fit, the next step is the Feasibility Session. In one hour with Barbara Yerondais, FRAIA, in person or on Zoom, you’ll talk through your site, budget and planning timelines, and leave knowing what’s realistic and what your next step is. There’s no obligation to go further.

BY Projects Architecture brings a record of more than 400 projects across Victoria to that conversation. That record is experience, never a promise about your council, your timeline or your resale price. To make the hour count, bring:

  1. your realistic stay, in years, from Step 1;
  2. the figure you are genuinely prepared to spend, buffer included;
  3. your list of what fails in the house now, in order of importance;
  4. any builder quotes or plans you already hold.

Builder, building designer and architect: who does what with your budget

Most renovations involve several professionals, each protecting a different part of the money. Barbara Yerondais, a fixed-fee renovation and extension architect, works alongside them, not in place of them.

  • The builder prices the work from the drawings and selections, then builds it under a major domestic building contract. The more precisely the documents describe the job, the fewer allowances the builder has to guess.
  • A building designer or draftsperson draws and documents the work. For a simple change with a settled scope, that can be the right level of design help.
  • The building surveyor handles the building permit process and checks that the work complies with the building regulations.
  • Barbara works out what the house, the site and the budget will hold before anyone draws, fixes her fee at feasibility, and stages the design so the scope is your decision before a builder prices it.

If your scope is already settled and drawn, a builder’s price may be the next step. If it is still a wish list, settle it with an architect first, while changes cost an afternoon rather than a variation.

Closing

A slow market makes selling harder, and so far it has not made building cheaper. Renovating now makes sense when you will live with the result for years and control the money spent before a builder prices anything. Fix the fee, settle the scope on paper, name your selections, and test the whole decision before you sign. For a deeper look at how we approach this work, visit our page for renovation architects in Melbourne, then talk to Barbara while the decision is still yours to shape.

Frequently asked questions about renovating in a slow market

Q: Is it cheaper to renovate in Melbourne while the market is slow?

A: Not automatically. The ABS Producer Price Indexes show input prices for house construction in Melbourne rose 3.5% in the year to June 2026, even as the mean Victorian dwelling price fell for two straight quarters. A quieter market may make builders easier to reach, but no published figure promises a lower price on your job. The costs you can control are the design fee, the scope and how precisely your selections are named before the builder quotes.

Q: What does a fixed-fee architect protect, and what does it not?

A: It protects the design fee for a defined scope. In Victoria an architect needs a written, signed client agreement before collecting a fee, and fees and costs must not exceed the fee structure in it. Barbara Yerondais fixes her design fee at feasibility, so it stays one agreed figure when construction costs rise. It does not fix the builder’s price, guarantee a planning permit or set a timeline. The builder’s price is protected by detailed drawings, named selections and variations agreed in writing.

Q: Will renovating now add value if I sell later?

A: Nobody can promise that, and we will not. What a renovation adds at sale depends on your suburb, your street, the quality of the work and the market on the day you sell. That is why the stay test matters: if you expect to sell soon, resale value deserves real weight; if you expect to stay ten years or more, judge the renovation by how well the house works for those years.

Q: Is my renovation too small for BY Projects Architecture?

A: Smaller jobs are welcome. Start with a free, no-obligation call with Barbara to see whether the project is a fit. On a small, simple renovation a fixed architect’s fee can look large against the build, and we will say so before you sign anything, so you can decide with the full picture.

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About the Author

Barbara Yerondais, FRAIA, is the founder of BY Projects Architecture. With 35+ years of experience, she specializes in sustainable, community-focused design and heritage restoration. A dedicated mentor and rower, Barbara balances her high-impact Melbourne practice with a passion for social inclusion and passive, energy-saving design.

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