On trend: home renovation

Over the past ten or so years, reality home renovation shows have grown significantly in popularity and viewership – cue The Block, The Renovators, House Rules and more recently Reno Rumble.

While new houses and off the plan apartments are still sought after by buyers and investors, renovating older premises have become increasingly attractive as a way to boost the value of their properties.

So have these reality renovation shows motivated this DIY enthusiasm? Or is there more to it?

According to the latest housing data from the Australian Bureau of Statistics, the value for alterations and additions to housing was $26 million in 1998, and has now sky-rocketed to $77 million in 2012 – a notable increase of contribution to the building industry; thus explaining this spike in popularity of DIY renovations.

The DIY trend could be due to buyers who are entering the market in better locations by buying older houses and proceeding to renovate, rather than buying brand new at double the price.

Renovating a house before putting it on the market is also becoming a part of this trend as a way to please buyers’ perceptions of the property and achieve a higher selling price - sleek kitchens and modern bathrooms sell houses, after all!

As an agency, we’ve observed this trend first-hand of buyers who are willing to offer more for older properties to later bulldoze and rebuild or renovate, if it means they have a higher chance of entering sought after locations.

The selling point of Location, Location, Location! has certainly been upheld throughout this DIY craze.

However with the Northern Territory’s State Government restricting the First Home Owners Grant to the purchase of new homes only as of 1 January 2015, we may start to see a decrease in the number of buyers choosing to renovate.

The question stands… what will this mean in the coming years for this escalating home renovation trend in the market?

So, what are some of the pro’s of renovating before sale?

- Renovation adds value to the property

- Renovation puts the property ahead of its local competition

Taking these pro’s on board, you will need to think about your target market and budget planning of the renovation to ensure you achieve the return on investment (RIO) you are looking for.

What are the pro’s for buying an older property to renovate?

- Prices may be more reasonable, thus leaving money left over to renovate

- Property can be renovated to suit own needs

- Property can be purchased in desired location

If you are thinking about selling or buying a property, contact us on (08) 8932 8858 and we can discuss what’s on the market.