How to add value to your property

Use of space and ambience are important considerations when you are thinking of adding value to your residential or investment property. Making the right move is crucial and even small changes can make an enormous difference, especially in an ever-fluctuating property market. Rather than mere cosmetic enhancement however, the addition of a room, an impressive extension or the improvement of entertaining and outdoor living areas can add noticeable value to your home. It is imperative to study the market, focus on saleability, estimate the maximum value of your property and research other properties in the area by talking to your local real estate agent.

John Barker, Victorian State Manager of Archicentre, the building advisory service of the Royal Australian Institute of Architects, noted in a special report entitled ‘Renovation Trends 2001-2002’ that the average Australian home improver has three significant renovation demands.

“One, they want an open-plan; two, they want plenty of natural lighting; and three, a casual living area that integrates well with the garden.”

However, Simon Tennent, executive director of housing and economics at the Housing Industry Association (HIA), believes that renovations are no longer an easy way to add value to a home because of the depreciation in property values in many parts of Sydney and rising building costs (‘How to price your property’, Lucy Macken, 20 October 2006). According to HIA figures, the number of renovations in NSW in the $12,000+ price range has fallen 18% in the past two years.

“There are people who renovate for profit, but the current market makes it much easier to overcapitalise on a property right now so even the professional renovators are taking it easy … people will overlook the shiny new bathroom or kitchen in favour of something more affordable today because they are aware of the recent interest rate rises and the increasing price of petrol.”

Figures from the Australian Bureau of Statistics for the March 2006 quarter demonstrate that the most popular major renovation over the three months was a ground floor extension around 67 square metres in size, valued at $118,232. If you are undertaking significant renovation of an existing house, Archicentre’s research suggests you should keep your budget to less than half the value of the property. That is, if you have bought an old house on land for $500,000, do not plan to spend more than $250,000 on renovation.

Statistics from the Special Report show that, using Sydney as a benchmark, it is 15% less expensive to undertake renovations in Melbourne and Canberra, 10% less in Darwin, 25% less in Adelaide and 20% less in Hobart, Brisbane and Perth.

Creating a unique atmosphere and ambience through lifestyle additions can assist in setting your property apart from the rest. Alex Longley, a landscape architect and project leader employed with Site Image in Alexandria, views the most significant opportunity as the unification of “the landscape with the built form by creating an extension of the home or an ‘outdoor’ room. This trend has been occurring for the last 10-15 years, where the family home has moved the living space to the rear of the dwelling and provides direct access to the garden.”

From a sales perspective, the landscape should have an appeal to a broad audience (expected purchasers) and Longley advises that personal detailing should be avoided.

“Always remember that the front of the house is the first and last memory of the property, so this space should be tidy, easy to maintain and have an element of intrigue that relates to the home … creating a sense of identity that the viewers will take away with them.”

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