Property expert says to avoid 'quirky' renovations

author-avatar By on April 14, 2021
Property expert says to avoid 'quirky' renovations

As residential building activity hastens, one housing affordability expert has warned against home renovators following trendy reality TV style cues.

Ian Ugarte, author of 'Small Is The New Big', said the trick is to use styles and finishes that appeal to a broad home-buying base, assuming home buyers are renovating to sell, rather than live in.

“While the glut of reality programs has seen a steady increase in renovating generally, deferring to trending styles that are at best ‘quirky’ and at worst just plain ugly, is likely to not only inflate the cost of the renovation, but also significantly limit buyer interest in the property,” he said.

"The last thing you want to do is limit or restrict your buyer base by introducing features like curved walls and floating beds that might have personal appeal, but are likely to alienate a chunk of possible buyers and potentially blow out your renovation budget in the process."

The fresh warnings come as the Australian Bureau of Statistics' (ABS) building activity data shows an uptick in residential builds, but to a lesser average value in the December 2020 quarter.

Private sector house commencements over the December 2020 quarter rose 26.6% compared to the September 2020 quarter, for a total of 33,761 private sector houses commencing.

This is a rise of more than a third compared to 2019's December quarter.

However, residential build value was $15.4 billion, only 2.6% up on the September quarter, and 1.7% down in value compared to the December 2019 quarter. 

Alterations amounted to just over $2.5 billion, up 3.1% on the quarter, and up 9.8% on the year. 

Mr Ugarte outlined some time-proof tips to heighten chances of a good return on renovation investment, including: studying the sold prices in the area, research planned and existing infrastructure in the area, creating a budget and sticking to it, and being realistic on how much growth is possible.

"Keep in mind that if you are planning on renovating, you're going to want to make a minimum of 20 to 25% uplift on your manufactured growth strategy," Mr Ugarte said.

“Like any form of investment, a renovation should be about making a profit – not just breaking even, or worse, losing money – and by carrying out this requisite research you’re best placed to ensure you’re not left short-changed once it’s done,” he said.

Building a home? Check out this handful of low-rate construction loans currently on the market.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
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Green Construction Home Loan (Interest Only)

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FixedMore details
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Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details

Fixed Rate Home Loan 2 Years

VariableMore details

Construction Home Loan (LVR < 80%)

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Construction Home Loan (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • No ongoing fees
  • Unlimited extra repayments

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of September 25, 2021. View disclaimer.


Photo by Chastity Cortijo on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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