Rockhampton renovation activity holding steady: HTW residential

Over the past month, residential property in the Rockhampton region (including the Capricorn Coast) has continued to tick over, with properties still being listed and sold despite the global pandemic, 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 report highlights where renovations are on the rise and the price points and outcomes those markets can expect.

The report notes there has been no evidence to date of a decline in values, in fact, some sectors of the market are continuing to improve slightly (i.e. modern, well presented homes on the Capricorn Coast).

"Regionally, we have been fortunate to continue with a very small number of COVID-19 cases which, combined with the recent easing of restrictions, is likely to support this trend to continue should the number of cases remain low in our region," the valuation firm said. 

Over the past 12 to 18 months in particular, there has been a notable increase in renovation projects in a small sector of the Rockhampton market.

Generally, small pockets of South Rockhampton, such as The Range, Allenstown and Wandal are sought after for their proximity to the CBD, schooling, hospitals and elevation available in some areas to provide city views to the east or vast hinterland views to the west.

However, given that the south side is characterised by Queenslander style homes and there is no room for growth or expansion due to the area being surrounded by flood plains, renovation presents the only option for those in the market wanting both southside convenience and contemporary living, the report noted. 

"In the balance of the market, renovation activity is generally holding steady, with some basic dwellings receiving a renovation to then be on-sold," the valuation firm said. 

This has started to occur after a period of very limited renovation in the low to middle sections of the market and this change is considered to be a combination of low interest rates, a preference by first home buyers to want properties with nothing left to do and a consistent, moderate upturn in the local economy.

Whilst the majority of the renovations seen are by long term owner-occupiers entering into a major renovation to create their forever home, there are a number of investors picking themselves up a bargain and completing a simple renovation (i.e. no structural changes) to then resell with the intent of turning a profit in a market which is starting to recover from an extended period of no capital growth.

There has been a number of sales evidenced over recent months where a building company has purchased a rundown property in an average suburb, renovated, professionally styled the home and resold at an expected profit with a short turn around.

"Styling and presentation is a key factor linked to the level of profit made. First home buyers still prefer new homes, however there are some who end up buying these more affordable, renovated existing homes with nothing left to be done," the valuation firm said. 

Buy in price points for renovators vary greatly. From sub-$200,000 for the investor-renovator through to $600,000 for the long term owner-occupier- renovator. End values then vary just as much.

The added market value of basic renovations tends to match cost and when the market is starting to recover, a small profit may be had, the report suggested. 

When a major renovation is undertaken however, it is a very different outcome. There is little to no evidence that the added value of the renovation will match or exceed the cost to construct.

"This is where it is important to be aware of the market in which you are renovating to determine where renovation dollars are best spent. Is it wise to make structural changes to the home or stick to cosmetic works only?

"A dwelling with a poor layout would benefit from a structural change to rectify, however if the existing layout is functional, that money may be better directed elsewhere," the valuation firm said. 

The report suggests being aware of town planning is also important when planning a renovation, particularly in older areas where perhaps a heritage overlay or neighbourhood character overlay is required to be complied with.

 A renovated family home in West Rockhampton has recently been sold for $290,000.

The four bedroom, one bathroom house is situated at 33 Stickley Street (pictured below).

Renovated inside and out, the home features new roof, timber flooring and new hot water system. 

It was last sold in 2005 for $190,000.

A classic Queenslander in Lakes Creek with renovated kitchen and bathroom is currently on the market with a price guide of $350,000 -$2380,000.

The three bedroom, two bathroom house is situated at 604-606 Montgomerie Street (pictured below).

It comes with open plan living, dining and kitchen, rear deck and rumpus room.