However, a renovated home in the right area could prove lucrative in years to come.
"The return on investment often comes down to the location," he said.
Older '70s and '80s homes in established suburbs such as Matua and Otumoetai were becoming tired and benefited from modernisation, he said.
However, '50s and '60s homes, built predominantly of plaster and native timber, were best renovated in sympathy with their original charm and character.
It was also common to remodel the interior of these homes with "good lines and solid bones" adding more light and open-plan living.
Often people bought a home, planning to add another room upstairs, without understanding the cost involved, particularly in terms of meeting the current building code.
Hidden costs could also emerge as demolition began and tradesmen uncovered bora or rot requiring the ground floor to be re-built before an addition could be made.
Any renovation work needed to be seamless, he said.
"Friends and family turn up and they can't tell where it stops and starts."
Owner of Refresh Renovations franchise Mike Archer said renovations were stacked with variables that could make them difficult to price.
"That's one of the hardest things I find is giving an estimate of what it's going to cost," he said.
"I might know my guys' hourly rate but I don't know how long it's going to take them. I haven't found any hard science around it yet."
New additions were often cheaper per square metre, and easier to price, than remodelling existing rooms, he said.
"The demolition costs, you've got to add that to it. Plus there's the cost of fixing everything together, the old and the new," he said. Mr Archer recommended all clients had a 10 per cent contingency fund up their sleeve.
When he purchased the franchise two years ago, Mr Archer was told the renovation market in the region - from Waihi Beach to Paengaroa - was worth $300 million.
"You have a look around Tauranga and there's stuff happening everywhere," he said.
Tauranga builder Garrett Jones, who owns Straight Up Builders, agreed clients often underestimated the costs involved in renovation.
"A lot of people are absolutely shocked at what things can cost, it adds up very quickly."
He added: "A lot of people scale down what they're doing when they realise what the costs are, even alterations, they often scale them down."
He also reinforced the potential for hidden costs to arise, including removing wood that was riddled with bora or rot.
Since moving to Tauranga from Auckland two-and-a-half years ago, Mr Jones said bathrooms had been the most popular room for renovation.
"They're not spending huge amounts on them - tiled floors, new showers and toilets."
At present potential customers underestimated how busy the building trade was in Tauranga.
"A lot of builders are busy for the next year, I've heard a lot of that," he said.
It wasn't uncommon for people to ring and ask him to start building their new home in two or three weeks.
Unexpected costs blow out budget
Haden Shaw and his family recently renovated their Mount Maunganui home and, while happy with the final result, they were unprepared for the cost and stress involved.
The addition of a master bedroom and en suite cost a lot more than was initially estimated, due to the builders finding asbestos in the soffits and the roof line not matching the plan the builders were working from.
It was also winter, which meant rain delays and a need to keep the new addition water tight.
Homeowners needed to be prepared to add $10,000 or $15,000 to the initial renovation estimate, Mr Shaw said. "The costs just keep piling up. We definitely underestimated the costs. It certainly was a little bit stressful but, once it was finished, it was worth it."
Mr Shaw, his wife Cindy, and their four children Pita, 7, Anika, 5, Frankie, 3, and Eli, 1, had outgrown the Concord Ave home they had lived in for five years.
"We looked at moving and we realised we weren't going to get what we wanted for the money that we had available," he said.
Buying a five-bedroom home - which is what the renovation has given them - in Mount Maunganui would have cost more than they were able to pay. After having six people sharing one family bathroom, and the two older children sharing a room, Mr Shaw said the renovation had made the house more functional.
"We have an extra bathroom and the kids all now have their own space as well.
"It just means that they can spread themselves a bit more," he said.
The family had already made minor upgrades to the house themselves, including installing a new kitchen and re-lining the office to create a nursery. They are now considering re-modelling the family bathroom.
Michele Hunter
