Renovation advice for home owners as demand continues - John McGrath

We are seeing the demand for renovated properties remain strong this year, as it has for the past three years. For homeowners willing to meet this demand, there are benefits to be had from both fast, targeted refurbishments or long-term makeovers.

In its latest monthly review, national valuations company, Herron Todd White (HTW), observed that renovation costs can be cheaper than that of selling a home, and buying another one.

In terms of financial outlay, Cotality’s Cordell Construction Cost Index (CCCI) report for this year’s June quarter revealed there has been a 31.3% increase in national construction costs since the start of COVID-19 five years ago.  Cotality research director Tim Lawless said this increase had created ongoing liquidity and feasibility challenges for builders and competition for skilled trades, which is likely to persist for several years.

Homeowners should definitely be prepared for major renovations such as a full kitchen makeover to potentially cost $40,000 plus.  Bathroom facelifts can also be costly and for these types of projects, you will need a licenced electrician or plumber.

HTW also noted that the cost of replacing a kitchen or bathroom is significantly higher than it was five years ago, with the trades and construction industries still busy following the COVID “bubble”.  But with that said, HTW said these industries – and their materials – are now more readily accessible.

Either way, if you’re planning to renovate or expand your property, you may be able to organise renovation finance or a construction and building loan with your current, or a different, lender.

Tips and advice

If you’re a homeowner keen to undertake a renovation, there are some important factors to consider before you start.

Firstly, do you like your current location?  You might live in a neighbourhood with proximity to your favourite amenities and other useful services, including school catchment zones and your place of work.  

Next, consider why you want to complete a makeover, as this answer will affect your budget and time. Are you an investor wanting to quickly update some cosmetic details before finding a tenant?  Are you an owner modernising your property for potentially a strong sale afterwards? In both cases, you should opt for a targeted refurbishment that will maximise the property's value.

If you’re a long-term, owner-occupier, you should still consider the possibility of a future resale. After all, the average amount of time people stay in their property is 11 years, according to PropTrack data in August 2023.

But in the short term, make a list of your priorities, beginning with essential items such as air conditioners or heaters. Depending on your time and budget, you may have to wait several years to complete your list.

Also remember that you can complete some changes yourself, which can save you time and money. These jobs include painting, tiling, installing curtains and blinds, building a backyard fence, and gardening. If you have a tradie mate to help you, even better. If nothing else, they can give you good advice and referrals.

Check with your local council before beginning any major extensions or structural changes to your home, especially if it is heritage listed.

Always obtain multiple quotes, don’t be afraid to ask for recommendations or referrals, and ensure any tradie you employ is licenced and certified. For sizable modifications, obtain a written contract outlining the work and payment details, costs, timeframe, and any guarantees and warranties.

Most importantly, stick to your budget, have a support network and take the time to enjoy the update once it is completed.