Renovation not a first home option
March 18th 2010 23:00
Brad Cook, West Australian State Manager of Archicentre, the building advisory service of the Australian Institute of Architects, said the traditional idea of buying a home cheaply and improving it with 'sweat equity' to trade up to a better property is also disappearing.
"The average house price rise across all capital cities in 2009 was 13.6 per cent according to the Australian Bureau of Statistics House Price Index figures. The demand for housing will increase as the population increases and with Australia building only between 130,000 to 135,000 new homes per year, we are far short of the 180,000 the Master Builders estimate the country needs," he said.
Mr Cook said the good news is if you do your homework, buy the right property and plan carefully you can make money given the rising house prices and demand.
"The current situation places the focus on careful planning to locate the Renovator's Delight and on working through a realistic plan for the renovation which is affordable and well designed to capitalize on the structure of the property."
Mr Cook said through Archicentre's pre-purchase inspection services we are also seeing many people considering the 'Renovator's Delight' doing their homework with an Archicentre Design Concept where the property purchaser establishes a basic design plan and a costing for their renovation including the staging of the project to ensure their options are financially viable for the property.
"With housing prices being driven up through a lack of supply and high demand, even rundown properties are becoming the subject of hotly contested auctions, with purchasers, who have paid a premium price for the property, faced with extra unbudgeted costs if they have not checked the property out carefully."
Mr Cook said the 'Renovator's Delight' has become a highly sought after property type in the current climate, but given their ever increasing costs can become a highly expensive exercise, especially if the property has major structural faults, termites, dodgy wiring and plumbing which have been carried out illegally.
"A thorough pre-purchase property inspection can actually save money as knowing the condition of the property can often provide a bargaining point with the vendors and many buyers are making the sale conditional on a pre-purchase housing inspection."
Archicentre's national pre-purchase home inspection statistics reveals all homes inspected had a range of faults including illegal building, rising damp, roof faults, faulty electrical wiring and cracking.
Archicentre's 'Renovator's Delight' Top Tips for Making Money
* Stay within a realistic price for purchase that you can afford
* Have a pre-purchase inspection from an independent source to assess the cost of any faults
* Ensure your renovation is designed to add value and is possible within the house structure.
* Plan your renovation in stages that are strategic and affordable
* Maintain a tight control on costs and tender for professional work to the get best quote
* Limit waste of materials
* Avoid expensive fittings such as imported taps
* Approach your renovation on a business model and keep an eye on the main aim to make a profit.
Information from Archicentre
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