It’s no secret that Perth is home to some of the most beautiful inner suburb estates and coastal properties. In the current climate, many Perth homeowners are opting to stay put and renovate rather than sell.
The emotional appeal of home renovations is a big driver for the vast majority of the market. Many locals love their location and their house but they’re looking for an upgrade, more space, a ‘never want to leave’ home that they fall in love with all over again.
As an added bonus, Perth is moving into its next growth cycle and many are finding that adding to their existing home can add significant value, particularly with older homes situated where median house price is higher than most. Low interest rates and an increase in dwelling stock are set to help boost Perth’s renovation market in 2018 and beyond.
However, not all renovations are designed to make you a tidy profit or a sudden surge in property value so it’s important to know what are the most lucrative renovation projects that can help you add value and give you the best return if you’re on the move towards sales day.
Second Storey Renovations
Second storey additions can be one of the most cost-efficient ways to gain more space. Building a second storey allows you to utilise your existing foundation and existing home structure. So, you’re removing the excess cost of needing to lay another foundation or another concrete slab.
In older Perth areas like Mount Hawthorn, North Perth, Nedlands, Wembley and Mount Lawley, many homeowners are restricted by land content and structural considerations. Many of the homes in these areas have significant ROI potential as you’ll find more of a period style character home that are hugely popular in the home renovation market. Small block sizes in these inner city areas are also perfect for an upward extension via a second story renovation.
Single storey home in Nedlands, WA before renovation.
Second Story Renovation in Nedlands; Courtesy of Nexus Homes Group
Add an Extra Bedroom for Massive ROI
These suburbs tend to have an average selling price of between $700,000 – $1,700,000 and houses in these areas tend to have a higher demand in the market. According to REIWA this demand puts has seen a 13.5% growth in median house prices in Nedlands in the year to the last quarter (2017/2018) whilst the Perth Metro Region has dropped 1%. This puts Nedlands in the top 10 suburbs to record the largest growth rate.
Sales data on realestateVIEW.com.au as at July 2018 is showing that a 3 bedroom home in Nedlands would sell for around $1,370,000 while the median selling price for a 4 bedroom home is currently around $1,835,000 which equals a $465,000 difference. Investing $200,000 for an amazing second storey addition that includes a master suite, ensuite and parents retreat could see your selling price increase $465,000. That’s $265,000 profit potential!
Combine that with the market demand in the area and surrounding suburbs, a quality second storey renovation that adds extra living space and additional bedrooms can not only upgrade and revamp your home for living, but also has the potential to add significant value and profit as well.
Kitchen and Bathroom Renovations
Some of the best investments and easiest ways to add the ‘wow factor’ to a dated home is by upgrading the big win items in the home such as the kitchen and bathroom. Nothing ages a home more than a tired, lifeless kitchen or bathroom.
We’re seeing a lot of activity in the kitchen and bathroom renovation space so we’re always recommending and designing plans that encompass the personality of the homeowners whilst keeping in with the all-important longevity factor.
New bathroom renovation; Courtesy of Nexus Homes Group
If you’re going to invest any money into a kitchen or living space renovation, you want to make sure that you focus on all the details such as function, use of space, fixtures and fittings, colour scheme and ensuring that you’re keeping in with a design that will still look modern and appealing for years to come. If your design is too ‘in trend now’ you run the risk of making a bad investment for two reasons.
1. If you plan on living in your home for many years, you may not always be emotionally connected with that design or maybe the layout now doesn’t suit your growing family.
2. If your design is too niched, then you run the risk of limiting your buyer pool and consequently reducing your property profit potential should you ever choose to sell. If you think you have some crazy renovation ideas, it often pays to seek the guidance of experts in the field to help you get the most value out of your ideas. That way you get to incorporate your designs in a way that brings out your personality but also creates re-sale potential to more buyers if you ever decide to sell.
Matt Keogh, Director at Nexus Homes Group says “on the whole, quality renovations will always add value so always go with the best you can afford. Most of our clients will opt for quality features like stone benchtops, statement lighting fixtures, windows and features that enhance the natural light and warm features like timber. You should expect to pay around $15,000 – $50,000 for an amazing kitchen renovation that enhances your lifestyle and increases your homes future resale value”.
Bonus Tip: The modular build process cuts down constructions times by up to one-third compared to traditional builds. Time saving processes like this can help you control the renovation much more efficiently, limiting delays and avoiding unnecessary blow-out costs. As an added bonus, home owners can go up without the hassle of an onsite build. Win-win!
Renovate Your Kitchen For Profit
Kitchen and bathroom renovations add value by appealing to buyer emotions which can help drive up your property value. Investing in a $10,000 kitchen renovation, in the right area that appeals to the right buyer can add enormous value to a property and could increase your profit potential by as much as $50,000-$60,000! More importantly, if your prepping your home for re-sale, high quality renovations like these can often be the difference between a sale or sitting on the market for months.
New kitchen renovation; Courtesy of Nexus Homes Group
About the Author:
Matthew Keogh is the Director of Nexus Homes Group, a specialist in custom designed second storey additions and home renovations in Perth, Western Australia. With over 20 years’ experience Matt provides industry advice on creating optimum customer experience through good design, thoughtful consideration of client requirements, expectations and budget.