Recently we surveyed over 1,000 Australians on the factors they value when choosing a property. We were interested to discover what actions people think would increase property value and what extra features they would be willing to pay more for. The results found that 56.6% of respondents believed a renovation is the most effective way of increasing the value of your home, and Australians are willing to pay more for a modern kitchen or extra outdoor space.
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There is a reason why 56.6% of Australians believe renovating is the best way to increase the value of a property, it is because it is widely considered the fastest way to boost a property’s value. While renovations can range from simple home improvements to major refurbishments and additions, such as adding another bedroom or level, it is important to consider the amount of money, time and effort you’re prepared to invest in a renovation, and which areas of your home would benefit most from an upgrade.
Renovators need to keep a close eye on their budget, some renovations may be very costly but fail to result in increased property value. This can create a situation where the cost of the property outweighs its market worth, also known as overcapitalisation. Our survey data has provided insights to help us understand what features the Australian public would be willing to pay more for when purchasing a property.
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It turns out the features you’re willing to pay more for in a home may change with your age. Baby Boomers tend to place more value on an additional bathroom or outdoor space such as a garden or yard. On the other hand, Generation X would pay more for a modern or updated kitchen.
A pool was the most popular choice among Generation Y respondents, nearly 30% said they would pay more for a house with a pool. Interestingly, however, a previous survey that asked respondents to put a dollar price on how much more they would be willing to pay for a home with a pool showed that most people wouldn’t pay more at all, except for the younger Generation Y. This indicates that the actual dollar amount people were willing to pay extra for a property with a pool may not be as high as most people think.
It is always useful to know who your target market is and broadly what they value. This can help inform your decision when it comes to deciding on where to focus your renovations in order to get the highest return. It’s also useful to talk to local real estate agents to find out their thoughts on what features buyers in your specific area are willing to pay extra for.
If you’re considering renovating, chat to one of our Home Loan Specialists to discuss financing the construction.
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