Melbourne house upsizing: How much it costs to upgrade your property around the city right now
Want to upsize to a bigger home? Melburnians are facing a more than $1m bill to find a property with just one more bedroom in many areas. SEE THE LIST
Melbourne families are facing a more than $1m bill to upgrade to a home with just one extra bedroom.
New Real Estate Institute of Victoria figures show a dozen suburbs across the city now have a four-bedroom median house price that is a whopping seven figures higher than that of a three-bedroom home.
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And with rising building costs making upgrading their existing home a challenge, there are fears a growing share of families will be forced to walk away from schools and community groups if they want to have more children.
The REIV’s list of $1m-bedroom suburbs is headed by Toorak, where the typical price rises by $2.8m from a three-bedroom house to a four-bedder, as well as affluent areas like Hawthorn and Brighton.
But once affordable St Kilda has joined their ranks, with its median three-bedroom home costing $1.544m — but a four-bedroom floorplan costing a $2.7m.
And with the cost of an extra bedroom adding six figures in vast numbers of other Melbourne suburbs, REIV president Jacob Caine said young families now needed to be thinking ahead for 20 years compared to the 7-10 years their parents might have planned for.
Mr Caine warned that for those who did upsize their family, the added cost needed to follow suit with their home could force other big life changes.
If you can’t commit to those financial requirements, then you will be forced to look elsewhere and move outwards and that has an impact on the community that you have perhaps become involved with and build deep connections with,” he said.
“There are really difficult choices that need to be made, either at the outset of getting into the property market, or once you are making your next step.”
Mr Caine noted the data should be particularly noteworthy for first-home buyers, with many opting for a $600,000-$700,000 two-bedroom unit in a desirable suburb — but perhaps not realising that a three-bedroom one in the same neighbourhood costs more than $1m.
He added that on top of the added cost of upsizing for an extra bedroom, families faced hefty stamp duty payments, about $55,000 for a $1m home purchase, which research had shown was stopping more than 90,000 Victorians from changing their address to better suit their needs.
“That says that people are making decisions about where to live based not on amenities in the area, or parks, or good schools … but purely on the basis of a tax,” he said.
Prominent buyers advocate Cate Bakos noted that for many of the suburbs where the median price rose the most, houses were built on relatively small block sizes of a few hundred square metres.
Ms Bakos said this meant the cost reflected heightened building costs, especially for adding a second storey to a house — which could come with planning, heritage and neighbourly issues.
“And buyers will say I’d rather pay the extra million than go through all that,” Ms Bakos said.
Gary Peer Real Estate partner Daniel Peer said that in some areas like Caulfield North, where going from a three-bedroom home to a four-bedroom one raises the median price by $1,041,500, a big factor was the shift from a 300-450sq m block to one that spanned 550-700sq m.
“So the REIV stats are right, but there’s a bit more of a reason for it,” Mr Peer said.
The figures also revealed about 20 suburbs around Victoria where upgrading was far more feasible, with a $1.16m median-priced four-bedroom house in Point Lonsdale only costing $10,000 more than a three-bedroom one.
In Frankston North the upsize only adds $15,250, while in Ivanhoe East extra space only adds another $20,000 to the price.
Ms Bakos said for affluent areas like Ivanhoe East, limited cost rises likely reflected repurposing rooms, with the suburb’s older homes likely already having space for four bedrooms within them — but designated as an extra living space in a three-bedroom floorplan.
However, Mr Caine added that in most instances where a home was expanded with a renovation to add an extra bedroom, that homeowners could expect to recoup their spend upon selling - particularly if they tackled the project with advice from good local real estate agents.
MELBOURNE’S $1M+ BEDROOM SUBURBS
TOORAK
Four-bedroom median: $5,730,000
Three-bedroom median: $2,920,000
Difference: $2,810,000 — 96.2%
HAWTHORN EAST
Four-bedroom median: $3,245,000
Three-bedroom median: $1,810,000
Difference: $1,435,000 — 79.3%
MALVERN
Four-bedroom median: $3,650,000
Three-bedroom median: $2,337,500
Difference: $1,312,500 — 56.1%
SOUTH YARRA
Four-bedroom median: $3,565,000
Three-bedroom median: $2,280,000
Difference: $1,285,000 — 56.4%
HAWTHORN
Four-bedroom median: $3,275,000
Three-bedroom median: $2,000,000
Difference: $1,275,000 — 63.8%
BRIGHTON
Four-bedroom median: $3,377,750
Three-bedroom median: $2,211,000
Difference: $1,166,750 — 52.8%
ST KILDA
Four-bedroom median: $2,700,000
Three-bedroom median: $1,544,000
Difference: $1,156,000 — 74.9%
ARMADALE
Four-bedroom median: $3,500,000
Three-bedroom median: $2,362,500
Difference: $1,137,500 — 48.1%
CARLTON NORTH
Four-bedroom median: $2,850,000
Three-bedroom median: $1,720,000
Difference: $1,130,000 — 65.7%
PRAHRAN
Four-bedroom median: $2,830,000
Three-bedroom median: $1,710,000
Difference: $1,120,000 — 65.5%
KEW
Four-bedroom median: $2,980,000
Three-bedroom median: $1,915,000
Difference: $1,065,000 — 55.6%
CAULFIELD NORTH
Four-bedroom median: $2,780,000
Three-bedroom median: $1,738,500
Difference: $1,041,500 — 59.9%
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nathan.mawby@news.com.au
Originally published as Melbourne house upsizing: How much it costs to upgrade your property around the city right now
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