A raft of half-built homes, some stripped to an empty shell of roof beams and structural timbers, have been coming up for sale – often below the prices the vendors paid. Here’s why

It was once a path to the Aussie dream for those willing to get their hands dirty, but doing home renovations has more recently become the ultimate nightmare for property owners.

With materials costs soaring, tradie shortages looming and budget blowouts on the cards, many once exuberant home renovators are now abandoning their projects after numerous setbacks.

Some have even called it quits after works had already started.

A raft of half-built homes, some stripped to an empty shell of roof beams and structural timbers, have been coming up for sale – often below the prices the vendors paid.

Some of these sellers admitted the monetary loss was a better and sometimes cheaper option than completing a renovation in the current climate of project backlogs and materials shortages.

Among the half-built homes recently sold for less than what the owners paid was a Redfern terrace on Elizabeth St.

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The stripped down property, which included a partially constructed extra room, sold for just over $1 million in early July – $100,000 lower than what the vendors paid.

Similar properties are currently up for sale in the Blue Mountains and various pockets of Western Sydney.

It comes as Housing Industry Association analysis showed rises in building costs over the past year were the sharpest annually since 1982.

Soaring materials costs were one of the biggest contributors to the increase.

Master Builders Australia data revealed prices for structural timber, steel beams and reinforced steel went up 40 per cent over the last year, with supply chain lags from the Russian invasion of Ukraine and lockdowns in China expected to drive further increases this year.

Housing Industry Association chief economist Tim Reardon said another contributing factor were labour shortages.

Border closures during the early pandemic meant tradies remained in short supply and competition for their services was escalating, Mr Reardon said, noting current renovation activity was 20 per cent higher than before the pandemic.

“The volume of projects is astounding,” he said. “It’s 15 years ahead of where we thought it would be.”

Upside Realty director James Kirkland said many home seekers who would otherwise have purchased a ready-to-enjoy property instead bought dated or rundown homes last year because that was all they could snap up in the boom market.

“Things were selling very quickly,” he said. “In the heat of the market, people were compromising on what they wanted and would have got a property that needed (work) just so they could secure something.

“Now these properties are no longer suitable because (the owners) can’t do the renovation they planned.”

Mr Kirkland added that would-be renovators were facing the prospect of a massive blow out of their original budgets if they continued planned works.

“Unless you got a fixed price from a builder, your budget will need to increase each time materials costs increase. It becomes a massive factor when considering if you’ll continue,” he said.

Sydney’s ongoing rental crisis was the final nail in the reno coffin for some homeowners, Mr Kirkland said.

“Most renovators doing big projects will need to rent somewhere for the six months or so it takes for the work to get done. That’s not so easy at the moment.

“Rents are skyrocketing and there are almost no rental properties available in some locations. The better option is simply selling and finding a property you can move into and enjoy straight away.”

Former Northmead resident Bianca Pratt is among the Sydney homeowners who abandoned plans to renovate their homes and said the decision became an obvious one.

Her family had ambitious plans to renovate their property but when they realised the cost would blow out to more than $400,000 they decided proceeding with the plan wouldn’t be worth it.

“We would have spent all that money and we still wouldn’t have got all the work we wanted,” she said.

“It was also hard to know how long it would take. We tried to get quotes for work, but we couldn’t even get a trade to come in and look at the property. They just weren’t interested.”

The family eventually concluded they would be better off moving to a new area, despite a gruelling search to find a new property.

“We had to see 60 different properties. It was a lot of weekends. I think we lost four auctions. That was still easier than I think it would have been if we did the renovation,” Ms Pratt said.

Her family have since moved to a new property in Kings Langley that requires no work.

Originally published as ’Astounding’ building industry shift makes renovators abandon works