Love It or List it: Why Melburnians are staying put
BUYING and selling costs and fear of getting locked out of the booming property market are prompting more Melburnians to stay put and renovate.
BUYING and selling costs and fear of getting locked out of the booming property market are prompting more Melburnians to stay put and renovate.
Stay-at-home adult kids are also tipping the scales in favour of home improvement as owners weigh up whether to “love or list” their home.
Despite the lure of snaring a top price in Melbourne’s hot sellers’ market, CoreLogic data shows just 4.5 per cent of all Victorian houses changed hands in the past year — down from 5.2 per cent the year before.
On the other hand, the number of loans for renovations has climbed substantially, with ME Bank reporting a 29 per cent increase in loans for cosmetic improvements and a 22 per cent rise in loans for structural work in Victoria in the first half of this year.
Interior design guru Neale Whitaker, who is firmly in the renovation camp on new Foxtel Lifestyle series Love It Or List It, said homeowners were discovering it was easier to make changes and fall back in love with their home than moving on.
“The majority (of homeowners) just want to create more space, so it’s about maximising space,” he said.
“Especially if they’ve been living somewhere for a long time, they stop realising the potential under their nose. But with careful planning, they can create the space they need.”
CoreLogic research analyst Cameron Kusher said “high transactional costs” were a deterrent for those considering selling.
WBP Group chairman Greville Pabst said there had been a “structural change in the market” towards remaining in the family home longer, with data from a range of sources revealing the number of transactions and listings coming to market were at “historical lows”.
“That’s suggesting more people are staying and living in homes longer than they were,” he said.
“Because children are staying at home longer, they’re not turning the family home over as much as they were.
“More people are buying and renovating rather than buying and moving.”
Mr Pabst said low interest rates, affordability and fear of missing out on other properties were other factors driving the shift, while ME head of home loans Patrick Nolan said many Melburnians were “choosing to stay put to avoid the high house prices, and expenses such as stamp duty”.
Realestate.com.au chief economist Nerida Conisbee said the decision to renovate or relocate often depended on local market conditions and a homeowner’s circumstance.
“The big one at the moment is stamp duty. It would be so enormous somewhere like South Yarra. In that sense, it may make more sense to renovate,” she said.
“In a cheaper suburb, it may make more sense to sell and upgrade.”
Realestate.com.au data reveals the suburbs where demand is strongest and selling might be the way to go.
It shows Berwick, Pakenham, Sunbury, Point Cook and Frankston were the most-searched suburbs on the listings website in the past six months.
Real estate expert and Love It Or List It co-host Andrew Winter warned homeowners should not expect selling to be the easy option or to get above market value.
Mr Whitaker urged those who decided to stay put and renovate to “focus on the thing that bothers you the most” and fix it first.
He said kitchens and bathrooms were the main problem rooms for most people.
Research from trade services website hipages shows Hoppers Crossing, Werribee and Mill Park were Melbourne’s top suburbs for kitchen renovations in the past year, while Glen Waverley, Rowville and Werribee were the city’s bathroom upgrade hot spots.
Interior designers were most often called to Forest Hill, Diamond Creek and South Melbourne, and pool builders to Templestowe Lower, Reservoir and Doncaster East.
Those torn between renovating or selling should calculate the potential resale value of their home versus the price of the property they’d be thinking of buying to determine whether it would make for “a realistic transaction”.
“Also (look at) the value that could be potentially added to your home and be careful about overcapitalising,” Mr Whitaker said.
“Have a look at similar properties that are unrenovated like yours in your area and see what they’re going for.
“Also look at the type yours would be like after a renovation ... and work out whether it’s worth doing. Because, let’s face it, even the most basic renovation is costly.”
— with additional reporting from Samantha Landy
Love It Or List It Australia airs on Foxtel Lifestyle on Wednesday, September 27, at 8.30pm.
LOVE IT
Tips
— Consider what you can do without spending any money, such as decluttering and rearranging furniture
— Identify the part of your house that bothers you the most and fix it first. For most people this is the kitchen or bathroom
— Calculate whether a full renovation makes the most financial sense, as even the most basic reno can be costly
— Look outside your four walls. Would you want to leave your neighbourhood if you could not afford to upgrade to a new house in the same area?
Melbourne’s top suburbs by reno project*
*Based on the number of jobs posted on hipages in these categories per suburb over the past year
Pool building: Templestowe Lower, Reservoir, Doncaster East
Kitchen renos: Hoppers Crossing, Werribee, Mill Park
Cabinet upgrades in kitchen renos: Melbourne CBD, Werribee, Frankston
Full bathroom renos: Glen Waverley, Rowville, Werribee
Interior design: Forest Hill, Diamond Creek, South Melbourne
Plumbing: Frankston, Epping, Glen Iris
Electrical: Reservoir, Melbourne CBD, Werribee
Carpentry: Melbourne CBD, Frankston, Eltham
Building work: Melbourne CBD, Mentone, Werribee
LIST IT
Tips
— Decide whether to buy or sell first, keeping in mind buying first may be the best option in Melbourne’s hot market
— Present your home in the best possible light, for example, by adding a coat of paint or cleaning up the garden
— Don’t expect your property to sell easily or above market value
— Have realistic expectations about the price your home can achieve by educating yourself on market conditions
Most in-demand Melbourne suburbs for buyers*
*Based on views of realestate.com.au listings in the past six months
Berwick: more than 335,250 searches
Pakenham: more than 250,060
Sunbury: more than 239,990
Point Cook: more than 232,340
Frankston: more than 230,640
South Yarra: more than 223,120
Werribee: more than 205,950
Mornington: more than 203,510
Mount Eliza: more than 199,390
Toorak: more than 199,020
Originally published as Love It or List it: Why Melburnians are staying put