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Why right now, 2026 is the best environment we have seen in over a decade to commit to a large-scale heritage renovation.
Picture a Victorian terrace home in Fitzroy. Bluestone footings, original Baltic pine floors, a beautiful facade sitting proudly on a 200m2 block. From the street it looks like Melbourne. The problem is, inside it feels like Melbourne. 14 degrees on a mild autumn day, the kitchen hasn't been touched since 1987, and the owners have been saying "we really need to renovate before the kids get too old" for the better part of three years.
"The gap between wanting to renovate and actually doing it is usually not a failure of intention, but a failure of confidence."
That gap between wanting to renovate and actually doing it is usually not a failure of intention, but a failure of confidence. Confidence in what it will cost, how long it will take, and whether the right people are on the job. If you’re sitting on a terrace home or period property in Melbourne's inner suburbs and asking yourself those questions, this is for you.
"Right now is the best environment we've seen in over a decade to commit to a renovation... Very different to previous yearsthat saw massive supplier instability and trade shortages."
Here’s the thing: in our experience at Sustainable Homes Melbourne, right now in 2026 is the best environment we’ve seen in over a decade to commit to a large-scale heritage renovation. Trades are available, timelines are reliable, and building costs have plateaued. Very different to previous years that saw massive supplier instability and trade shortages. The window is open. But to take advantage of it, you need to approach your renovation the right way from day one.
There are really only two approaches we would recommend when undertaking a significant renovation of a heritage or period home in Melbourne. Everything else carries unnecessary risk.
Approach 1: Engage a Design and Build Company
The first approach, and the one we most strongly recommend for heritage renovations in Melbourne's inner suburbs, is working with a design and build company. The reason comes down to incentives.
Most design and build companies, including Sustainable Homes Melbourne, are builders first. We recognise the importance of great design and have built it into what we offer. But design is not our primary business objective. Getting your home renovation complete is. That single alignment of interest changes everything about how your construction budget gets managed.
A design and build team is motivated to find ways to achieve exceptional results within real-world constraints. A good design and build company knows how important your budget is, and it’s very easy to go off track while during the design phase. At SHM we keep a close eye on your budget from start to finish to ensure no nasty surprises when signing building contracts.
For inner city Melbourne renovations specifically, heritage overlay experience is not a nice-to-have. It is essential. Knowing how to work with bluestone footings, period-accurate materials, and the specific requirements of councils across Yarra, Merri-bek, Stonnington and Boroondara can save months and tens of thousands of dollars in rework and reapproval.
Approach 2: Engage an Architect
Experienced builders recommend engaging architects with caution, and for heritage renovations especially we want to be direct about why. The sobering reality is that between 50 and 70% of home designs are never built. The overwhelming majority of those shelved projects were designed by architects. Most are abandoned for one reason: the design exceeded the client's budget and there was no one in the room early enough to prevent it.
This is not a criticism of architects as a profession. The best architects are truly visionary, and in the right circumstances on the right project, the result they deliver is extraordinary. An architect is the creative force behind a home. They are never, however, the best person to guide you on what something will cost or how it should be built.
If you do choose to engage an architecture firm for your inner-city heritage renovation, you should also engage a builder under an Early Contractor Involvement (ECI) agreement from the beginning. Not at the end when the plans are finished. A builder in the room during design prevents the catastrophe we’ve seen too many times: a client coming to us with plans they’ve fallen in love with, spent three years developing every detail, goes to tender, and receives pricing that comes back way over budget. After all that time, emotional energy and money spent, the plans go in the bin. That is an avoidable tragedy. Early Contractor Involvement is how you avoid that.
Renovating a Victorian terrace or Edwardian home in Carlton, Brunswick, Glen Iris, or South Yarra is not the same as a standard renovation. The complexity compounds quickly.
Heritage overlays govern what can be changed, what must be retained, and what must be approved by council. Some councils are more nuanced in how they apply overlays than others, and knowing the difference matters. Structural realities, including cracked bluestone foundations, load-bearing walls in unexpected places, and unreinforced masonry, are far more common in pre-1940 homes and require a builder experienced with similar projects. And the material finishes that make a heritage renovation feel authentic, including period joinery, traditional render, and matching timber species, take relationships with specialist suppliers that only come with experience.
The families who get this right are the ones who bring construction knowledge into the design process early. Not after the architect has produced a beautiful set of drawings but before a single line is drawn.
We won’t pretend the current environment is without complexity. Global material supply chains still carry uncertainty, and the 2026 Federal Budget's changes to capital gains tax and negative gearing are shifting the property investment landscape in ways worth watching. For homeowners renovating a home they intend to live in, the effect is largely positive: demand for owner-occupied renovation work is holding strong, while some of the speculative pressure that inflated costs during the peak years has eased.
"Right now, must-have trades for Victorian terrace renovations are more available than ever... we've more predictable timelines and more accurate pricing..."
Stonemasons, heritage joiners, specialist plasterers who understand lime render and period finishes, as well as experienced heritage renovation carpenters are the must-have trades a Victorian terrace renovation demands, and right now they are more available than ever.
For inner city Melbourne renovations, that is a breath of fresh air. We’re seeing more predictable timelines, more accurate pricing than previous years. When demand returns, these same trades will be absorbed quickly. Families who move now on their heritage renovation will be glad they did.
"When demand returns, these same trades will be absorbed quickly."
The common thread through every renovation that finishes on time and on budget is this: the right people were involved from the beginning. Budget decisions were made openly and early with practical construction knowledge in the room. The renovation was designed to be built, not just to be beautiful on paper.
At Sustainable Homes Melbourne, we’ve been renovating inner city homes since before 2014. We’ve worked with heritage overlays, bluestone footings, cracked party walls, and councils from Yarra to Port Phillip. We know what a large-scale heritage renovation involves, what surprises tend to emerge, and how to structure a project so that neither of those things derails what you're trying to create.
Don't let your renovation become part of the 70% that never makes it off the drawing board.
If you would like to know more about renovating a heritage home in Melbourne, please reach out to Sustainable Homes Melbourne or call us on 1800 683 697.
