PROPERTY REPORT - Issue 84

Buy yesterday with the resources of tomorrow.

How often have you heard someone say, “I should have bought three of them!” referring to cheap houses for sale a decade or two or three ago, which are now worth millions. You think to yourself, but you didn’t have the money then. 

That is the quandary in real estate investment. How do you buy yesterday with the resources of tomorrow?

It may seem like that is the only way to outpace this market. As the Reserve Bank governor Michelle Bullock recently said, every time we predict house prices we seem to get it wrong. Across the nation, house prices have resumed their upwards trend. Melbourne may be statistically neutral for now, but that is unlikely to last, especially in light of the growing volume of buyers.

Twelve-year low building rates are another factor aggravating the pent-up demand for housing. Couple that with the slump in building rates – from 11.4% last year down to just 0.7% in the December quarter – and you have a recipe for growth in existing housing. In addition, the cost of building a new home has increased by 35 per cent since March 2020, according to the Bureau of Statistics.

So while we all wish we could buy yesterday’s cheap property with tomorrow’s income, there is something you can do with today’s resources: renovate.

While Spring approaches, and new building declines, most Australians are choosing to renovate, spending an estimated $2.55 billion on renovations in 2023 alone.

In 2024, homes built in the 70s and 80s are approaching their 50^th and 60^th birthdays. Updates are generally well overdue. So if you are considering selling your home, it is worth considering whether any upgrades will yield dividends.

Hot tip: the Victorian home buyer fund caps eligible renovations at $10,000, meaning if younger buyers are receiving government help, they are unlikely to be able to afford to renovate the home they’re buying. This has led to a greater demand in “turn-key” homes.

Closely consider your kitchen or bathroom. Are your appliances keeping up? If you can’t afford a new kitchen, perhaps modern cabinetry alone will do the trick. If your home has internal sheeting on the walls or ceiling, or the plaster is sagging, a plasterer can pin fatigued sheets cheaply. Think about your home’s unique selling proposition and make sure it is front and centre.

We love to help our clients maximise their home’s potential. We also regularly provide advice to homeowners who are at least 6 months away from selling – sometimes a year or two away. It is never too early to plan your next move, and often you will be better off allowing more time than less. If you need specialist advice from the only agent on the mountain, give Integrity Real Estate a call on 5786 2033, or visit us at any of our three office locations in Kinglake, Healesville or Yarra Glen