Finding your perfect home in your preferred locale, for the right price can be a real challenge. Low interest rates, international buyers and growth in house prices have created a very competitive auction environment in highly prized suburbs. Here’s one way to access the market on your own terms.
If you’ve been looking for your perfect home for a while, you’re probably tired of the open for inspections, the anxiety of auctions, the emotional roller coaster of falling in love with a property only to miss out on the day.
Having enjoyed several decades of growth Melbourne’s home prices are now amongst the highest in the world and some homes continue to sell for record prices.
Changing demographics, low interest rates, overseas buyers have all fuelled the price growth.
Combined with this, is our desire to find the ‘perfect’ home one that offers everything we want in a home. Preferably, it doesn’t need too much maintenance, is well located and delivers a quality lifestyle for future years.
The effect of this is a market of scarcity, where the best housing ‘product’ is fiercely contested by a well-resourced few.
So how can you find your perfect home in such a challenging market?
In any suburb, sales prices (from the lowest cost to high end properties) typically vary by around 30%. That means with a little creative planning you can access the market at less than the premium price then renovate the property to your own budget, taste and lifestyle.
For example, let’s look at some typical figures for the suburb of North Fitzroy.
Based on recent sales results (May 2015), a single fronted three bedroom home (two storey extension at rear) that’s well presented and requires no maintenance (a premium offering) will attract a price of $1.3 – $1.4 million.
However, an un-renovated single front, two bedroom home (a renovators delight) will sell for around $800k – $850k.
That’s a differential of up to $600k. However, the cost of a renovation to convert the renovators delight to a premium 3BR home may only be $300k.
That means you finish up with a home you love, in the right location valued at $1.4M for just $1.1M.
You would need to plan ahead, consider properties you would have passed over before and be prepared to wait out the renovation period in your existing home.
This strategy will dramatically increase the number of homes you can consider, giving you a much greater chance to obtain your perfect home for your future years.
If you’d like to find out more about how this approach can work for you, call me on 0405 327 949 no obligation.
If you’ve seen a property online that might be suitable for you, I can look at it online while discussing it’s renovation potential with you on the phone. Try our Online Renovation Costs Calculator
About the Author
A specialist in adding value to your home through renovation, Richard Armstrong has undertaken innovative post graduate property valuation research to identify what enhancements add the most value to homes in specific Melbourne suburbs. Educated in interior design, he is also a Registered Building Practitioner (DBL 37456).
Over the last decade, he has helped hundreds of inner metro Melbourne clients undertake renovations to update their homes and create a new, fresh and modern look all while growing the value of their property.