As the lower number of homes for sale continues to present challenges for buyers, the inclination to sell and then buy a new home has become a somewhat less attractive proposition for some Australians. When deciding whether to renovate for profit or sell, more homeowners than usual are choosing to invest more into the property they already own. The prospect of trying to jump up a level to something else and risk not finding the right place has some homeowners erring on the side of caution.
Over the last few years, the trend towards renovating and home alterations has increased nationally. Research by Roy Morgan in early 2017 found that almost 62% of Australian home owners had engaged in some kind of home improvement in the 12 months prior. This ranged from small alterations such as curtains, flooring, wallpaper and painting, to electrical and plumbing work, insulation and major renovations. Almost 20% of homeowners spent more than $5,000 on their renovations, with a large percentage of those people having lived in their property for less than 12 months. The trend seems to be that those moving into a property want to get in and fix things early on, more so than those who have been living in their property over the longer term.
These figures were reinforced by findings from a recent Westpac survey of 1,000 home owners, that showed an increase of 21% over the last 3 years in the number of Australian owner-occupiers undertaking renovations on their own home. As discussed in a recent article in The Real Estate Conversation, the Westpac survey also found that renovations were increasingly common amongst newlyweds and expectant parents. There was also an interesting breakdown of generational trends, with the majority of renovations undertaken by millennials (87%), gen Xers (78%) and baby boomers (77%). Older generations and retirees make up just 1 third of those renovating their own properties.
So if these trends are anything to go by, there is certainly strong support of the idea to renovate rather than sell. An interesting point made in The Real Estate Conversation article was that Master Builders Australia forecasted spending on renovations over the next 5 years to hit $44 billion. Deciding to invest further in your current property and wait for a shift in the market (instead of moving) can take the pressure off, and at the same time improve the potential of your capital gain over the longer term.
A committed property owner will be making small improvements to their property on a regular basis anyway, but if you’re thinking of making changes on a larger scale it’s a good idea to get advice about what renovations are currently providing the best response from buyers. Your first step should be to get an appraisal from your local real estate agent. This gives you the chance to get a ‘before’ figure that you can follow up on later with an ‘after’, once your renovations are complete. The process of getting an appraisal provides valuable feedback about the current state of your property, through the eyes of a real estate professional. The agent can also advise you on what kinds of renovations would be worth investing in,without the risk of overcapitalising, and they can also provide a friendly and skilled ear for your ideas to add value to your property, before you start tearing down walls and ripping up carpets.
To book your appraisal today, contact your local First Nation Real Estate agent and start making plans.