www.mcgrath.com.au
I’ve recently spent some time in Melbourne as a judge on reality TV series ‘The Block’. The premise of the show is around four couples who are given the challenge of renovating an entire house each, with one room delivered per week for judging.
Renovating is something Australians love to do. It’s all about reinvention and adding value to one of your biggest assets. It’s also a great way to improve your living environment and it can add serious new value (and equity) to your home or investment.
But while I was in Melbourne I read about a new trend. According to The Age newspaper, an increasing number of people in Melbourne’s inner and middle rings are bulldozing their existing homes and starting all over again as a deliberate alternative to renovating.
The story quoted David Hallett, state manager of Archicentre, who said there had always been buyers who had purchased houses with plans to knock them down and re-build. “What’s new is the growing number of building firms offering ”stay-put” deals that bundle together the costs of demolition and putting up a new house,” the article said.
And Hallett is right. People have been buying ‘dumps’ and knocking them down to re-build for many years. This isn’t a new strategy. But what they’re seeing now is mums and dads deciding to bulldoze the perfectly nice house they’ve lived in for years because re-building is actually cheaper than renovating, and even cheaper still than selling (factor in agents’ fees/marketing) and buying something new (factor in moving costs and stamp duty).
Generally, when you find your current home is no longer big enough to cater for you and your growing family, you face a choice. Do you renovate and/or extend your existing property or do you move? Well now, building firms are providing a third choice and promoting ‘stay put’ packages that include total demolition and re-building. So why do it?
Here are some reasons:
- If you love where you live, it’s worthwhile exploring all your options, especially if you’re on a decent sized block of land that would allow a larger house to be built on it.
- Another factor is cost. Professional valuers Herron Todd White estimates the cost of renovating is double per square metre compared with building a new dwelling. There are often hidden costs with renovating, especially if you own an older style property. Rewiring, putting on a new roof and so forth are major works that can cost a lot of money.
- The remaining aspect is you. Maybe you want a totally new look for your home or you desperately need more space and you simply can’t achieve it through renovating.
It will be interesting to watch this new trend and see if it further develops. If you’re in the process of considering renovations or a re-build, I have some advice.
If you live in a period home with great original features, it’s worth considering renovating instead of re-building. Buyers love period details and in my experience, well-established suburbs with period architecture tend to grow faster than newer suburbs. People appreciate the architectural uniqueness and consistency. In comparison, new ‘catalogue’ homes can be duplicated and built in any number of locations and lack the same scarcity value.
If you do decide to re-build, keep your new home sleek and modern with neutral exterior tones to help it blend with the neighbours. I strongly recommend investing in an architect to create a unique home with modern finishes that will appeal to many buyers in the future.
