It’s a tough market for buyers in Sydney’s eastern suburbs real estate market and many homeowners are staying put.
And unsurprisingly, home improvements are in vogue as would-be upgraders renovate their current digs to avoid having to face the property market. But it’s not the usual type of renovation we’re noticing.
Instead of the typical renovations seen in this area, such as updating the kitchens and the bathrooms, there’s a big focus on squeezing out extra bedrooms and living spaces from other parts of the home.
In fact, there’s an entire shift from renovations to extensions currently happening in the eastern suburbs and potentially across other parts of Sydney. These are homeowners who can’t find what they want, so they have to create it – often tapping into their home’s substantial equity in the process.
In particular, homeowners are looking into attic extensions, adding to the back of the house by extending the boundary wall and even building above garages. The 2016 Houzz & Home report from Houzz surveyed 14,000 Australians and found that renovating non-master bedrooms was a priority for one in five. Over a third indicated they were renovating rather than buying, as it was the more affordable option.
These types of renovations are particularly popular as they not only add space for large growing families, but they also tend to be big value-add tickets when homeowners look to sell. When we market homes that haven’t been extended but have the potential to be, this is usually made mention of in the listing as it’s a draw card for future homebuyers.
It’s worthwhile speaking to a real estate agent before undertaking the renovations to get a sense for what demand there is in the market for larger dwellings. You should also speak to a builder, or another appropriate professional, earlier on in the process to identify as many opportunities up front.
In Sydney’s eastern suburbs real estate market, some homeowners will find extensions aren’t an option for them as many properties are within the conservation area and possess heritage overlays – particularly in Paddington, Darlinghurst and Woollahra.
They may still be able to extend in some circumstances, but it’s up to council and which parts of the home are protected. Anyone without structural renovation experience will find it a big task to add an extension, whether it’s heritage listed or not, but for those intending to spend another five or more years in a property it could be a worthwhile decision.
It’s also worth familiarizing yourself with some of the stress that comes with any renovation or extension and ensuring your timing has been carefully planned. One major difficulty for homeowners is the shortage of tradespeople and the surge in construction costs.
We’ve heard reports of construction costs surging 20% in some circumstances, which can make these bigger structural home changes less feasible. ServiceSeeking figures have started to record a slight drop in the cost of tradespeople as building activity wanes towards the end of the year.
If this continues to fall then it might make extensions even more attractive for homeowners.
Sydney’s Eastern Suburbs Market Snapshot 2016
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.