Renovation trend continues in inner Sydney during COVID-19 pandemic: HTW residential
It is not uncommon to see residential properties undergoing renovations throughout the inner suburbs of Sydney, according to the latest Herron Todd White (HTW) residential report.
The valuation firm suggests 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.
The HTW report notes narrow laneways with skip bins and trucks parked on the kerb is an all too familiar sight for many older heritage style localities in suburbs such as Glebe, Surry Hills and Darlinghurst.
"This trend has been evident for many years now and we expect it to continue into the future, even within this current COVID-19 pandemic," the valuation firm said.
"One of the reasons we anticipate minor renovations to be evident in the short term is due to people being locked-up at home and looking for constructive projects to complete around the house which will serve many purposes such as increasing the presentation of their homes and also providing much needed stimulation throughout this lockdown period," the valuation firm explained.
The report notes this could partially explain the continued demand and long queues at Bunnings Warehouse over recent weekends.
Even larger renovation projects have continued to be evident as owner-occupiers look to improve the value of their properties and engage builders and tradesmen at potentially reduced costs, at least in comparison to recent years.
A slowing construction sector, low interest rates and lack of supply in many locations and sectors are likely to encourage renovation projects in the near future.
"Investment properties such as older style home units are also likely to see continued renovations as potential tenants are provided with greater choice at reduced asking rents," the valuation firm said.
It will be imperative that investment properties are presented in the best possible condition, otherwise tenants will quickly choose a competing property in superior condition or alternatively demand a discounted rental price for any sub-par properties.
When renovating it is essential to understand the main goals for doing so, whether that be to sell, rent, or purely to renovate to personal taste to live in long term regardless of how this appeals to the local market.
A few significant aspects to consider when deciding to renovate are in relation to possible heritage restrictions, planning limitations, site access and the scope of works being carried out, the report noted.
"We hear of many renovation success stories, however a significant part of this requires understanding the intended personal objectives of renovating a property and if renovating with the aim of selling for a profit, then timing of the market cycle (which can involve some level of luck) is important," the valuation firm said.
"Some other techniques to ensure renovations are not overcapitalising is by focusing on what the local market desires most, researching recent sales of similar properties (on completion of the renovations) and then ensuring the cost to do the chosen works does not blow out your budget or exceed the market value of the finished product."
A recent example of a blank canvas property at 47 Wigram Road, Glebe (pictured below), which sold for $1.86 million at an online auction on 4 April, almost $200,000 above reserve, indicates that there is still demand for this type of original property that requires a full renovation.
