Western Sydney home renovation on the rise: HTW residential
If the queues at Bunnings are anything to go by, home renovation seems to be on the rise in western Sydney, according to the latest Herron Todd White (HTW) residential report.
The valuation firm suggests that in locations across the nation, the downtime delivered by isolation has spurned on owners looking to improve their assets through maintenance and upgrade. This month's HTW residential report highlights where renovations are on the rise and the price points and outcomes those markets can expect.
"Niggling jobs that have been put on the backburner are now being addressed, be it patching a hole in the wall, reconfiguring the rear garden or even a second storey extension," the valuation firm said.
Western Sydney is a diverse area for real estate and this allows residents a larger choice in property.
Families who have outgrown their existing property have a number of options such as upgrading to a new property in the growth areas or buy an existing dwelling and renovate, the report noted.
The north-west and south-west growth precincts have seen substantial development of new dwellings on smaller allotments over the past five years, with many buyers upgrading to these ready- made new products rather than undergoing an extensive renovation on their current dwelling.
"Given the lower price points in western Sydney compared to eastern Sydney, it is vital to analyse the current renovated sales to ensure you are not overcapitalising.
"This is particularly important for investors as it is dead money that could have been used elsewhere.Owner-occupiers may not be as concerned as over time these costs will be absorbed as the market improves," the valuation firm said.
For years, investors have been actively buying older run down properties in western Sydney and updating the dwellings to not only add value but increase rental return.
The addition of a well-placed granny flat in the rear yard further increases the yield for the investor.
An example where this has worked is at 12 Aitape Crescent, Whalan (pictured below) in the Blacktown LGA.
This three-bedroom, one- bathroom dwelling sold for $366,000 in February 2019 and after undergoing a full renovation, sold for $520,000 in February 2020 through Raine & Horne Penrith.
Before
After
"Regarding the cost to renovate, it seems that engaging a skilled tradesperson to complete some work is not a cheap exercise.
"One has only to look at the number of shiny, dual cab utes on development sites to see that skilled tradespeople are in hot demand, mostly thanks to the amount of infrastructure and construction within the Sydney metropolitan area," the valuation firm said.
In Prestons, the difference between a renovated and unrenovated entry level home is demonstrated by the results of two sales this year.
18 Cedar Road (pictured above), an unrenovated property, sold for $676,000 in January, while 32 Grevillea Crescent (pictured below), with a basic internal renovation, mainly to the kitchen and bathroom, sold for $740,000 at the end of March.
Whilst not a large uplift, it would easily cover the cost of completing the renovation works, the report noted.