Central Gold Coast
The lockdown has certainly provided us with a great opportunity to take care of any maintenance issues and even make some cosmetic improvements to our property investments. Whilst there is still a degree of uncertainty in the market, a growing number of homeowners are preferring to wait out this period before putting their property up for sale. To date it has been the budget-conscious owner occupier looking to take this time to complete some renovation work. Many of these owner-occupiers are only completing small scale DIY cosmetic work (i.e. new paintwork, general repairs) and are not looking to spend too much money on trades. Owner-occupiers who are carrying out larger scale renovation works on their properties at the moment are generally people with building skills or who work in the construction industry.
Local agents actively selling in the central Gold Coast area have reported that even though stock levels are low and demand levels have remained fairly steady, properties are generally taking longer to sell now. They advise that buyers are becoming more discerning as there is less urgency in the marketplace at the moment compared with last year. Interestingly, the overall presentation of a property is becoming more of a critical issue. Some agents in Broadbeach Waters recently noted that if the property is not well presented or has some outstanding repair issues, it could result in a significantly discounted sale price, so there may not be a better time to get those odd jobs done around the house!
Southern Gold Coast/Northern New South Wales
There are opportunities available by way of renovation works in the far northern New South Wales and southern Gold Coast suburbs. The more established and desirable suburbs such as Coolangatta are showing opportunities for the savvy investor or existing resident to manufacture capital growth in an uncertain market. Across most of the area, selling agents have advised a reduction in stock levels and slightly longer selling periods as a result of the recent border closure and COVID-19.Be it DIYers looking to be productive during lockdown, forward-thinking homeowners looking to manufacture equity or a lack of confidence in the current market, homeowners appear to be taking the opportunity to add value to their homes through renovation works, rather than selling in a perceived slower market. Predominantly the more established areas such as Tweed Heads
Gold Coast Central/North East
In the Gold Coast north-east area from Southport to Hope Island and out to the M1, home renovation works appear to be on the rise. Investors conducting any more than cosmetic works such as painting and floor coverings are rarely seen, resulting in the owner-occupiers conducting most of the renovation works. These owner-occupiers are opting to renovate rather than relocate, with the supplementary aim of manufacturing equity within their property. The central and north location is an established area and discussions with home owners conducting renovation works is that they like the area in which they live and for the cost of relocation, the decision to renovate or extend their existing dwelling is a more desirable option. Furthermore, in areas such as Southport and Labrador, the option to increase income through granny flat extensions or to build in self-contained flats underneath high set homes is also being exercised due to the opportunity of an increased yield on the property.
At present, due to COVID-19, the current economic climate appears to be uncertain with limited quality properties on the market and owner-occupiers choosing to use their spare time to improve their homes, in which they are spending more time. However, we do caution renovators not to over capitalise as cost does not necessarily equal value. Be mindful of the median price point in your area as well as what drives purchasing decisions for the broader market. For example, installing a $10,000 water feature in a $400,000 house may not equate to a good return on investment if you plan to sell the property in the short to medium term. A recommended exercise is to outline your renovation plans and then look, with an unbiased opinion, at recent sales in the area similar to your proposed plans in order to justify the expense you are considering.
Renovation is a hot topic at the moment through the northern corridor and southern Logan suburbs. Particularly for home occupiers who have experienced a reduction in work, COVID-19 has presented an opportunity for some to finally get around to those renovation works or cosmetic improvements that have been put on the back burner for the past three, five or maybe even ten years. So far, suburbs such as Upper Coomera, Ormeau and Beenleigh have seen a rise in the number of houses currently undergoing or recently having completed renovations or minor cosmetic work, some with the intention of increasing their equity, others erring on the side of over capitalisation. Over-capitalisation isn’t a worry to some, particularly rural residential property owners in the south and south-west Logan areas, as some people would prefer to invest their spare cash into their current property and avoid the hassle of moving house due to upgrading and relocating. Over the past two months, we have seen owners begin to undertake small scale projects such as retaining walls, concreting, new sheds and landscaping and even renovation or extension projects amounting to up to $325,000 and everything in between. While we have so far noticed only a small increase in current or recently completed renovation projects, this is a popular topic and people are spending more time at home at the moment, so this trend is likely to increase. Buyers are quite cautious at the moment and properties requiring work sell for a significantly discounted price, so while the market might present some opportunities to pick up a discounted renovator, as a buyer, caution is to be exercised as the future of the property market and economy remains uncertain.
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