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Why does a project home cost the same as a renovation?

January 22, 2018

If you’ve progressed any way at all down the renovation path, you would have discovered pretty quickly that it’s fairly easy to get to $250,000 without trying too hard. That kind of money will get you a ground-floor extension, but it might not cover re-doing your ensuite as well. Which is hard to understand when you flick through the Sunday papers and see page after page of project home after project home being offered for $250,000. That’s a four-bedroom, two-bathroom family home for the same price as a large living room and a kitchen reno. Whaaaaat?


And that’s when you probably ask yourself, how does a project home cost the same as a medium-size renovation? How is that possible?

Check your wardrobe

In the simplest of terms, it’s all about scale. Think about purchasing clothes from a chain store as opposed to getting custom-made garments from a tailor. The chain store clothes are pretty good – they fit ok (sometimes too long or short, but basically OK), the colour is pretty good (maybe not the exact hue you were after), and the quality is not bad (that does depend on which chain store you’re shopping at). And there’s thousands of items just like it on the racks in stores around Australia and the world.


Compare that to having a tailor or dressmaker sew a custom item for you – first they’ll measure you, then you’ll discuss design and fabric, they’ll start making the garment and there will be at least one, if not two, fittings to go through before the garment is finished. And when it is finished, it will fit you perfectly and no-one else will have an item exactly like it. It’s completely unique to you. It’s easy to see where the difference in price comes from.

A project home

It’s really the same with a project home – they have homes already designed for you to choose from. Their designs tend to have some variations to suit different block sizes and topography, but your ability to change the design is limited.


Because they’re building hundreds, if not thousands, of homes every year, the project home companies have great leverage with manufacturers and suppliers. After all, if you’re buying windows for 5000 houses every year, you’ll be paying less for them than someone who’s buying windows for five houses a year.


Because the designs are set and the materials are set, there are no surprises for the tradesmen working on the site – they’ve done the same thing many times before so they become quick and efficient at it. That keeps costs down because the project home companies know exactly how long it takes to do site works, pour the slab, erect the frame and so on and so forth.

A custom build

A bespoke renovation on the other hand is starting from scratch every single time – the design of the renovation is completely unique to your house and site. It needs to accommodate the existing building and topography, as well as your design needs. Tradesmen working on your project are, of course, experts in their trade, but they haven’t done your exact project before and there are always unexpected surprises that pop up on a job. Dealing with these takes time and can have a knock on effect to other trades.


While flatpack kitchens are great, there’s a reasonable chance that your renovation will have some kind of custom joinery that, again, is designed and will be built specifically for your house. Just like a tailor-made dress is fitted precisely to your body.


There are other differences as well – many project homes do not include driveways, landscaping and fencing in their price. And the display that looks so fabulous is usually the top of the line model that has multiple extras added to it (at an additional cost). Project home kitchens will tend to have cupboards rather than drawers, as drawers are more expensive to build.


Comparing a project home to a renovation or custom build is a bit like apples and oranges, but I think it’s good to have an idea of where those price differentials occur. Both can yield a great result and, as with everything, your budget and outcome is unique to you.



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