14 December 2022

The value of smart renovations in a cooling property market

| Dione David
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The Facelift Renovations team stand outside Parliament House in Canberra

The blowout in new construction lead times in Canberra means the Facelift Renovations team is in high demand. Photo: Facelift Renovations.

The peak of the Australian property market might have come and gone, but Facelift Renovations director Jimmy Jang says the renovations market is showing no signs of slowing down.

“During COVID, people had disposable income and were spending a lot of time at home,” he says. “Nobody expected construction and renovation in Canberra to boom like it did, but in hindsight it’s not surprising.

“The market value for houses might have dropped since then but as a builder and renovator I can say there is still a lot of demand in Canberra for home improvements.”

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Jimmy says regardless of a property market downturn, renovations can still raise the value of a property.

He says as costs and lead times for construction increase, the industry continues to grapple with wage increases, staff shortages and inflation on building materials.

His material costs have tripled compared with two years ago and his lead times have ballooned to about seven months.

“I know of other companies that currently have lead times in excess of a year. The industry is getting wary of committing much further ahead because it’s difficult to predict what will happen to the cost of materials and labour, and we want above all else to be able to honour our commitments,” he says.

“Everyone knows the cost of renovating as well as wait times have gone right up, so seeing a home where that’s already taken care of – that carries a great deal of added value right now.”

bathtub and basin

If you want the most prospective buyers to be able to picture themselves in the property, opt for neutral colour schemes. Photo: File.

However, he says smart renovators need to consider how to renovate with respect to their goals.

“If you’re an owner-occupant and going to stay a minimum of 10 years, I say go for it and renovate to your own tastes. But if you’re planning to sell within the next five, it’s smarter to make choices that will maintain a wide buyer pool,” he says.

“Renovate for the everyman. If you want the most prospective buyers to be able to picture themselves in the property, opt for neutral colour schemes.”

Jimmy says when it comes to raising the value of your property, it’s not just a question of how but where.

“Start with the bathroom, then move on to the kitchen. These are high-value areas of the house.

“If these rooms look old, chances are they’re not up to current Australian standard building codes, which means if and when it comes to renovating, it will be a costly exercise.

“Everyone knows renovations are expensive and taking longer at the moment. The way things are tracking, buying an older house and trying to get it renovated could take people a year or two. So if that process is done and you put a house on the market fully renovated, that’s hugely appealing.”

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He says with longer lead times, potential renovators should book work in sooner rather than later, but there are actions they can take to help mitigate risk.

“All your provisional costs or ‘PCs’ as we call them, if you come across ones you like at a good price, buy them and leave them onsite so they’re ready for when the work begins. That way, you’re immune to rises in PC prices. These include bathroom fixtures such as taps, tiles and so forth.

“Build contingency into your budget. If you can’t spend more than $100,000 on your renovations, don’t allocate the lot – ensure a percentage of that is kept as a margin for error.

“Last but not least, keep following up with your builder to see how they’re tracking for time, budget and materials.”

For more information, visit Facelift Renovations


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