Dusting off an old diamond in the ‘burbs

Western Australian home renovations have soared 44 per cent compared to pre-pandemic levels, with more than $694 million of alterations and additions greenlit in the past financial year.

The Australian Bureau of Statistics’ Building Approvals data also reveals that the Mount Lawley and Inglewood area ($17.4 million) is a reno hot spot, along with the Mount Hawthorn and Leederville area ($13.2 million) and Fremantle ($12.7 million).

Realmark Urban Residential Sales Consultant Chris Pham said the rise in renovation was partly due to low housing stock levels, which had forced many families in the Mount Lawley and Inglewood area to stay where they were and renovate.

“They’re finding it very hard to upgrade in the current market,” he said.

“Another factor is fully renovated homes are in such high demand that they are achieving a huge premium and people just can’t afford to purchase something that’s already finished.

“In a large proportion of cases, especially if they have owned their property for a long time, it works out less for them to renovate than move.”

But Mr Pham warned some homeowners were underestimating their residence’s value by hundreds of thousands of dollars, which could mean trading up was a cheaper option than renovating.

It was also important to factor in construction costs had increased up to 30 per cent and completion times had blown out to 18-24 months amid the building boom.

Mr Pham said the Federal Government’s $25,000 HomeBuilder grant for owner-occupiers to build a new home or substantially renovate an existing one, which closed earlier this year, had little impact on the area because the income limits made most households ineligible to apply.

In the case of unrenovated properties on the market, he said there was high demand from entry-level buyers and developers.

“Developers can make a substantial amount of money by renovating the existing home, then subdividing the land and selling both,” Mr Pham said.

Curtain & Co Real Estate Director Lauri Curtain said ‘renovator’s delights’ were hot property in the Fremantle area.

“Buyers with a smaller budget will compromise on the quality of the home to buy into the right location and renovate over time,” she said.

“And some look at the big picture when buying. Their current budget may only buy them a renovated three-by-one home but if they consider they’ll outgrow it over time, they’ll buy a larger unrenovated home.

“Due to the cost of housing, extended families now live at the same property, so unrenovated homes provide a base to renovate and add ancillary accommodation.”

Ms Curtain said a rundown 1950s three-bedroom, one-bathroom cottage on a 540sqm block at 3 Holmes Place, Hilton sold for $120,000 above its price tag.

It attracted 100 buyer inspections, 10 written offers and changed hands for $520,000 after two home opens.

It was a similar story at 27 Snook Crescent, also in Hilton, where a three-bedroom, one-bathroom house untouched since the 70s sold above the ‘from $700,000’ asking price after notching up 7058 online views, 37 inspections and three written offers.

Ms Curtain said both homes had to be renovated due to their location in the Hilton Garden Suburb Precinct heritage area, which prevented demolishing them.

“Older homes offer character features that are hard to replicate and, when renovated to include modern amenity, they boast a unique and appealing charm that makes you feel like you just found and dusted off an old diamond,” she said.