Budget blowouts can leave homeowners in a state of shock
Why do renovations tend to go over budget? Cowan Building gives some important advice.
Budget blowouts are often the result of poor planning, unexpected costs, and lack of transparency between builders and homeowners. And then there are the unforeseen issues – such as leaking pipework behind the walls or a rodent-infested home with electrical damage.
But here’s the good news: some of these pitfalls are entirely avoidable with the right approach. Setting a realistic budget and understanding the process are vital when building a new home or renovating an existing property.
Unforeseen Problems That Can Blow Out Your Renovation Budget
Even the best-laid renovation plans can hit unexpected roadblocks, especially when working with older homes. Hidden issues behind walls and under floors often aren’t discovered until the work is well underway, leading to additional costs and delays.
Here are some of the most common (and costly) surprises to watch out for:
Outdated or Damaged Plumbing
Old, corroded, or poorly installed plumbing is a frequent hidden problem in renovations. Discovering leaking pipes, rusted fittings, or outdated materials like galvanised steel can require a complete plumbing overhaul, adding both time and significant costs to your project.
Electrical System Issues
Electrical wiring that fails to meet current safety standards poses not only a financial risk but also a significant safety hazard. Renovations often reveal old or overloaded wiring, ungrounded outlets, and switchboards that can’t handle the loads of modern appliances. Upgrading these systems is essential, but can be a costly surprise if not factored into your initial budget.
Structural Problems
Hidden structural damage, such as rotten framing, sagging floors, or compromised foundations, can halt your renovation. These issues often require specialist assessments and remedial work before your project can continue, significantly impacting your budget.
Asbestos and Hazardous Materials
In older homes, discovering asbestos or lead-based paints is a common and serious issue. Safe removal must be handled by certified professionals, which can add thousands to your renovation costs.
How to Prepare for the Unexpected
Include a Contingency Fund: Always set aside an additional 10–20% of your budget for unforeseen issues.
Get a Detailed Building Inspection: Before starting your renovation, have a professional assess the property for potential hidden problems.
Work with Experienced Builders: Trusted professionals like Cowan Building know how to anticipate and manage these challenges to keep your renovation on track.
With proper preparation and expert support, even the most challenging surprises can be managed without derailing your renovation plans completely.
Hidden Costs People Forget to Plan For
If you’re starting a building or renovation project, watch out for these often-overlooked expenses:
Site Preparation Costs: Clearing land, earthworks, and drainage solutions can add unexpected costs if not factored in early. For those living rurally or looking at tiny homes on rural properties this can also include septic systems.
Consent and Compliance Fees: Council approvals and permits are essential, but can be costly if not budgeted for. In New Zealand, this can also include Geotechnical Reports, Resource and Building consents.
Design Changes Mid-Project: Last-minute alterations to plans or materials can quickly blow out costs.
Upgrades and Finishes: Premium fixtures and fittings may not have been part of the original quote—plan for these upfront.
Temporary Accommodation: If renovating, don’t forget to factor in where you’ll live during the process.
Landscaping and Driveways: These finishing touches often fall outside the initial build cost but are necessary for a complete home.
How Mid-Project Design Changes Can Blow Your Budget
One of the most common reasons building budgets spiral out of control is due to changes made after the project has already started. While it’s tempting to add extra features as you see your home take shape, every change—big or small—can have a significant ripple effect on both your budget and timeline.
Here’s why:
Extra Powerpoints & Electrical Changes:
Deciding halfway through the build that you want additional powerpoints or USB charging stations may seem minor, but it often requires extra wiring, additional materials, and sometimes reworking walls that are already lined or completed.Added Luxuries Like Underfloor Heating:
Choosing to install underfloor heating after the flooring has been planned or laid isn’t just costly—it can mean pulling up work that’s already done, purchasing new materials, and extending the project timeline significantly.Upgrading Fixtures & Finishes Midway:
Swapping out standard tapware for designer options, or deciding to upgrade to premium flooring materials partway through, can add thousands to your final bill - costs that weren’t accounted for in your initial budget.Adding or Modifying Windows and Doors
Introducing new windows or altering existing ones can affect structural integrity, insulation, and energy efficiency. These changes often require additional framing, potential re-engineering, and can disrupt the construction schedule.Changing Bathroom or Kitchen Layouts
Modifying the placement of plumbing fixtures or appliances in kitchens and bathrooms can be particularly costly. It often involves rerouting plumbing and electrical systems, which can be complex and time-consuming.Landscaping Adjustments
Deciding to add features like decks, patios, or extensive landscaping elements during construction can strain the budget. These additions may also require separate permits and can extend the project's completion date.
Pro Tip: To minimise disruptions and keep your project on track:
Finalise Designs Early: Make all design decisions before construction begins to avoid costly changes later.
Stick to the Plan: Resist the urge to make changes once the project is underway.
Communicate Clearly: Maintain open communication with your builder to understand the implications of any proposed changes.
Consider Alternative Accommodation to Help Manage Costs
While it may seem more economical to stay in your home during renovations, it can often lead to increased labour costs and project delays. Living on-site means builders need to spend valuable time each day making the work area safe and liveable before and after they can actually get started on the job.
Here’s how this impacts your budget:
🔧 Daily Setup and Pack-Down: Builders must pack and unpack tools, materials, and equipment every day to keep the space tidy and safe—this adds extra hours to your labour costs that don’t directly contribute to progress.
🧹 Additional Clean-Up Requirements: Living on-site means daily clean-ups are essential to maintain safe walkways and reduce dust and debris in living areas, again increasing labour time.
🚧 Limited Access to Work Areas: If certain rooms or sections of the house can’t be fully closed off, this can slow down work and prevent larger, more efficient stages of the renovation from being completed.
A Smarter Approach
If possible, consider arranging alternative accommodation—whether that’s staying with family, a short-term rental, or even scheduling a holiday during the most disruptive renovation phases. While this may seem like an added expense upfront, it can save you significant labour costs and help ensure your project is completed faster and more efficiently.
Plan in Detail Before Breaking Ground
The key to avoiding these costly surprises is detailed planning up front. Take the time to:
Walk through your design plans room by room and visualise how you’ll live in the space.
Consider practical additions like powerpoints, lighting placement, and heating before the build begins.
Decide on finishes and fixtures early—right down to door handles and tapware.
Create a clear list of "must-haves" versus "nice-to-haves" so you stay focused on what truly matters to you and your budget.
At Cowan Building, we help homeowners carefully plan every detail before the first foundation is poured, ensuring the end result meets your expectations—without costly last-minute changes.
How to Set a Realistic Budget for Your New Home or Renovation
Setting a realistic and well-planned budget is one of the most important steps in ensuring a stress-free building or renovation experience. Here’s how to approach it like a pro:
1. Define Your Total Spend Limit
Start by understanding your financial position and how much you’re comfortable investing in the project. This includes any lending capacity if you’re securing a loan. Remember to allow a contingency buffer of 10–15% for unexpected costs. Homeowners who do not have a buffer can get into trouble when something unforeseen occurs, leaving the project at a standstill.
2. Create a “Must-Have” and “Nice-to-Have” List
Be clear on the features you need versus the features you want. Prioritise essentials like bedroom sizes, kitchen functionality, and energy efficiency before allocating budget for extras like underfloor heating or designer fixtures. A visual board can help with this and allow homeowners to see what they ‘need’ from the living space, and what they can compromise on to stay on budget.
3. Get Detailed Quotes Early
The more detailed your project plans, the more accurate your quotes will be. Work with a trusted builder like Cowan Building to understand all potential costs upfront—including site works, consent fees, landscaping, and finishing touches.
4. Consider the Timing of Your Build or Renovation
Building costs can vary depending on the time of year and demand in the industry. Plan ahead and lock in contracts early to avoid price increases or material shortages.
5. Understand the Cost Per Square Metre
For new builds, calculate the approximate cost per square metre based on the level of finish you’re after. Be realistic about how far your budget will stretch and design your home accordingly.
At Cowan Building, we help you through every step of the budgeting process—from initial design concepts to final costings—ensuring you’re fully informed and confident before any work begins.
How Cowan Building Keeps Your Project On Budget
At Cowan Building, we believe in full transparency and clear communication from day one. Here’s how we help you stay on track:
✅ Expert Project Management: Our experienced team manages every stage efficiently to prevent costly delays.
✅ Regular Budget Reviews: We keep you informed throughout the process, so you always know where you stand financially.
✅ Smart Design Advice: Our team works with you to find cost-effective solutions that still deliver on style and quality.
Affordable Home Builds and Budget-Friendly Renovations in Marlborough
Whether you’re building your dream home from scratch or upgrading your current space, Cowan Building specialises in creating beautiful, functional homes—without the budget stress.
Don’t let the fear of hidden costs hold you back. With careful planning and the right team on your side, you can achieve an affordable, high-quality result that meets both your vision and your budget.
📞Ready to get started? Contact Cowan Building today to discuss your next project and how we can help keep