When does a cost problem become a discipline problem?

For an industry already absorbing rising costs, this is not a future issue. It’s here.

StewartBrown suggests for villages older than 25 years, operators are already spending more than $75,000 to refurbish a standard two-bedroom unit. A 30% increase pushes that up by a further $22,000.

At the higher end, where refurbishments are sitting closer to $120,000, that same movement adds another $36,000.

Under modern contracts, these costs sit with the operator.

Which means the pressure is not just on individual refurbishments, but on how well the overall village budget is understood, structured and managed.

Which brings this back to fundamentals.

First, does your resale pricing have the capacity to absorb this? Not theoretically. Practically.

Second, how disciplined are your internal systems when it comes to procurement and delivery?

Because this is where the margin is either protected or lost.

What came through clearly in the discussion is that high-performing operators are not leaving this to chance. They are deliberate.

They are testing the market, not relying on a single contractor – rather they take a panel approach. More than one contractor, working to an agreed scope of work (to minimise variations) and finishes schedules.

This is not about a ‘race to the bottom’ – driving costs to the lowest possible number.

It is about professionalism and control. In a rising cost environment, control becomes a competitive advantage.

For DCM Institute participants, this is a topic we will be exploring further in an upcoming Masterclass, with a focus on the practical systems and disciplines required to manage refurbishment cost escalation in real time.