North Melbourne major renovations in decline: HTW residential
Given that Inner North suburbs of Melbourne tend to comprise older dwellings, at least relative to the outer north, it is within these suburbs – including Coburg, Reservoir and out to Greensborough and Bundoora that most likely to see homes undergoing renovations, according to the latest Herron Todd White (HTW) residential report.
The valuation firm suggest 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 report highlights where renovations are on the rise and the price points and outcomes those markets can expect.
Older homes, often held in families for many years and kept in their original state will often undergo impressive modifications and upgrades once sold to owner occupiers looking to make their homes larger, modern, comfortable and better suited to modern life.
The report suggests renovators can often expect to see healthy capital growth as a result of these renovations bringing these properties up to meet the expectations of potential purchasers for these areas.
There are a number of areas in the Inner North where ‘pop up’ rear extensions to existing heritage facades are becoming more commonplace as a means of meeting the requirements of heritage protections.
"We have seen numerous examples of these, where older homes with small and enclosed living areas have been opened up, increasing natural light and utilizing spaces in a more functional way," the valuation firm said.
"In recent months as a result of the Coronavirus pandemic, we have noted that the occurrence of larger renovations and extensions has reduced, bucking the trend of the past several years where renovations have been commonplace, particularly as a result of gentrification in many areas and a large number of homes constructed in the 1980’s becoming more obvious candidates for modernisation," the valuation firm said.
Prime examples of this can be seen in Reservoir and Montmorency where homes with renovation potential can be purchased for between $700,000 and $850,000 and $800,000 to$900,000 respectively, the reported noted.
"Once fully renovated, we are seeing homes in Reservoir achieve $1.1 million to $1.3 million and Montmorency, $1.1 million to $1.4 million," the valuation firm said.
A three bedroom Clinker Brick Veneer house in Reservoir has recently been sold for $1.07 million.
The 31 Rubicon Street home (pictured below) has been renovated and extended.
It comes with open plan living, light-filled family room and decked entertainment area.
It was last sold in 2007 for $476,000.
A current listing is an updated four bedroom house in Montmorency priced at $1.05 million to $1.15 million.
The 3 Reichelt Avenue home (pictured below) comprises two living zones, two updated bathrooms and study.
It's situated within walking distance to schools, shops and cafes.
Investors in the outer north suburbs, looking to attract tenants or sell are more likely to carry out more modest or cosmetic renovations for ‘easy wins’, partly as a result of homes in these areas being much younger, with layouts not differing too much from new homes being constructed today.
The report notes minor renovations in these areas will tend to be limited to painting, replacing floor coverings, and perhaps a new kitchen, bathroom or deck.
"Moving forward, we expect that the prevalence of major renovations will continue to remain in parity with the economy and if this continues to deteriorate, then it is reasonable to expect that renovators will become less willing to spend big," the valuation firm said.