Every home bleeds money, whether you budget for it or not
Every home needs ongoing repairs and upkeep, and those costs catch most new owners off guard. The industry rule of thumb is to budget at least 1% of your property's value each year for maintenance and repairs. On a $750,000 home, that is $7,500 a year, or roughly $145 a week, set aside before anything breaks. A single hot water system replacement can wipe out an entire year of that budget in one afternoon.
- A third of recent first home buyers had less than $10,000 remaining after settlement .
- A hot water system replacement alone costs $1,800 to $3,500 .
- Plumbers and electricians charge $80 to $200 per hour plus a $60 to $100 call-out fee .
Without a maintenance buffer, one routine repair can push a new homeowner into debt or force them to defer the fix, which only makes it more expensive later.
The 1% rule gives you a simple, scalable number to plan around
is a widely used budgeting guide: set aside 1% of your property's value each year for maintenance and repairs. It works because maintenance costs scale with the size, complexity, and value of the home you own.
Here is what the 1% rule looks like at different price points:
Property value | Annual maintenance budget (1%) | Weekly amount |
|---|---|---|
$500,000 | $5,000 | $96 |
$650,000 | $6,500 | $125 |
$800,000 | $8,000 | $154 |
$1,000,000 | $10,000 | $192 |
Some years you will spend less. Other years, a roof repair or plumbing emergency will blow past the budget. The 1% figure is an average over time, not a fixed annual cost .
What breaks, and what it actually costs
These are the repairs that hit most Australian homeowners at some point. Prices reflect 2025-2026 trade rates :
Repair | Typical cost |
|---|---|
Hot water system replacement (electric) | $1,800 - $3,500 |
Hot water system replacement (heat pump) | $3,500 - $7,000 |
Roof leak repair (minor) | $1,000 - $2,500 |
Roof replacement (full) | $12,500+ |
Blocked drain or plumbing repair | $150 - $600 |
Exterior repaint | $4,000 - $9,000 |
Interior repaint | $3,000 - $6,500 |
Electrical fault diagnosis and repair | $200 - $800 |
Fence replacement (timber, per panel) | $300 - $700 |
Tree removal (medium) | $800 - $2,500 |
Plumbers and electricians charge $80 to $200 per hour, plus a call-out fee of $60 to $100 . Even a small job can cost $250 to $400 once you factor in the minimum charge.
Property age changes the equation
The 1% rule works best for homes between 5 and 20 years old. Newer and older homes behave differently .
New builds (0-5 years): Your builder carries obligations. Structural defects are covered for 6 years in most states (up to 10 years in Victoria), and non-structural defects for 2 years . During this period, your maintenance costs should be minimal. Budgeting 0.5% of property value is reasonable while warranty cover applies.
Established homes (10-30 years): This is where the 1% rule earns its keep. Hot water systems, roofing, and paintwork all start reaching the end of their lifespan. Budget the full 1%, and expect some years to run higher .
Older homes (30+ years): Budget 1.5% to 2%. Plumbing, wiring, roofing, and structural elements may all need attention within a short window. Properties of this age can cost $5,000 to $10,000 or more per year in maintenance .
Property type shifts what you owe
If you own a freestanding house, every repair is your responsibility. You maintain the roof, the gutters, the fencing, the garden, the driveway, and everything inside.
If you own a townhouse or apartment in a strata scheme, your strata levies cover shared building maintenance. But the 1% rule still applies to everything inside your lot, including your kitchen, bathroom, flooring, internal plumbing, and appliances. Do not assume strata fees cover all your maintenance costs. They cover the . Everything within your four walls is on you.
Set up the fund before you need it
The simplest approach is a dedicated savings account with automatic transfers. Set up a weekly or fortnightly transfer that matches your 1% target. On a $750,000 home, that is $145 a week.
Keep this money separate from your everyday spending and your emergency fund. Your emergency fund covers job loss or illness. Your maintenance fund covers the hot water system that dies in the middle of winter. They are different risks and need different pools of money.
Putting maintenance off does not save money — it multiplies it
does not save money. It multiplies costs. Industry research shows that every $1 deferred in maintenance can become $4 to $7 in future repair costs .
The pattern is predictable. A small roof leak costs $500 to fix. Left for a year, water damage spreads to the ceiling and framing. Now you are looking at $5,000 or more for structural repairs and mould remediation . A $200 gutter clean skipped for two seasons can lead to $2,000 in water damage to fascia boards and external walls .