Renovations

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<p>GUEST OBSERVER</p>
<p>When renovating for profit, never rely on a selling agent’s estimate of renovated value.</p>
<p>Buyers should do their own research to establish the ceiling price of fully-renovated properties in the suburbs they are looking to buy.</p>
<p>You can’t rely on selling agents to give you an accurate estimate of the renovated value of a property.</p>
<p>Not only is it in their nature to be very bullish with sale prices as no one wants to list their property for sale with a pessimist; it’s also in their clients’ financial interest for them to be bullish.</p>
<p>They want to paint the property in the best possible light to encourage you to make an offer on it. </p>
<p>The other problem is that it’s also an unqualified estimate as they may interpret what you intend to do with the property as more high end than you are actually planning.</p>
<p>Many property experts are predicting that unrenovated houses will be the most sought-after property purchases in 2017 as buyers shy away from an oversupply of new apartment buildings.</p>
<p>Those properties in need of renovation will be even more popular this year especially if they are livable, allowing DIY renovators to move in and reside onsite whilst undertaking renovation works over time.</p>
<p>When you’re renovating for profit, adding value is the name of the game.</p>
<p>Unfortunately you can’t add unlimited value to a property because there is a limit as to what the market will pay no matter how good it looks.</p>
<p>Once a home has reached its ceiling price for the accommodation it offers, buyers will not pay more.</p>
<p>When you’re undertaking comparable market analysis you need to establish the ceiling price of fully renovated properties that are similar to the ones you’re targeting.</p>
<p>Be mindful of the top values and resist the temptation to overspend.</p>
<p>Tips when searching for an unrenovated property:</p>
<ol>
<li>Get to know the price difference between renovated and unrenovated properties in your chosen area so you know what you can spend and still not overcapitalise.</li>
<li>Find out which streets to avoid and the unique pockets that attract higher prices.</li>
<li>Understand the value of desirable features: parking, views, proximity to shops, schools, parks and public transport.</li>
<li>Get lots of ideas for improvements for your property by looking at the features of other homes that are for sale.</li>
</ol>
<p><em> </em></p>
<p><em>Patrick Bright is the Director of buyer’s agency EPS Property Search and can be contacted <a href="https://www.epspropertysearch.com.au" target="_blank">here</a>.</em></p>
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Never rely on a selling agent's estimate of renovated value: Patrick Bright

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<p>GUEST OBSERVER</p>
<p><span style="line-height: 1.3em;">The Housing Industry Association has released the latest edition of </span><em style="line-height: 1.3em;">Renovations Roundup. </em></p>
<p><span style="line-height: 1.3em;">The report offers the most comprehensive quarterly analysis of the home renovations market in each of the eight states and territories, and outlines forecasts for renovations activity. </span><em style="line-height: 1.3em;">Renovations Roundup </em><span style="line-height: 1.3em;">also provides results of the exclusive HIA Renovations Survey undertaken in February 2016, in which over 900 businesses and individuals participated. </span></p>
<p>The HIA Renovations Survey provides a comprehensive update on conditions within the sector.</p>
<p>Repairs and maintenance are the most popular type of job, followed by kitchen and bathroom renovations.</p>
<p>A significant 24 percent of renovation jobs fall within the value range of $12,000 to $40,000. The survey also found that 13 percent of renovation jobs fell in the range of $200,000 to $400,000. This reflects demand for comprehensive renovation work which covers a large part of the footprint of an existing house and is an area of the renovations market that should gather momentum in coming years.</p>
<p>Total renovations activity grew for a second consecutive year in 2015, rising by 4.4 pe cent.</p>
<p>However, the recovery remains quite fragile and there is considerable geographic variation to activity.</p>
<p>Several markets are benefitting from the improving labour market along with stronger dwelling price growth. In other places, weak earnings growth, relatively low turnover of established houses and tighter credit conditions are holding activity back.</p>
<p>The <em>Renovations Roundup </em>projects that renovations activity will increase by 0.7 percent this year with growth of 1.7 percent forecast for 2017. HIA projects that activity will grow by 2.8 percent in 2018 followed by a 3.2 percent increase in 2019, bringing the total volume of renovations activity to $33.02 billion.</p>
<p><em>Shane Garrett is senior economist for HIA and can be contacted <a href="https://hia.com.au/en/BusinessInfo/economicInfo/EcoGroup.aspx" target="_blank">here</a>.</em></p>
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Renovations recovery continues to battle on: HIA

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<p><span>GUEST OBSERVER</span></p>
<p><span>Homeowners are electing to undertake renovations rather than sell their properties in an attempt to avoid stamp duty.</span></p>
<p><span>The number of property transactions had hit a four year low for the month of October 2016 according to data from the NSW Office of State Revenue. </span></p>
<p><span>The number of Land Related Transactions transactions in October 2016 was 17,312, almost 12 percent less than the same period last year and at levels last seen in 2012. </span></p>
<p><span>There were 55,745 transactions for the first 3 months of the 2016/2017 financial year down 7 percent on 2015/2016. The fall in transactions saw a decline in government revenue of more than 4 percent to $2.0643 billion. </span></p>
<p><span>Latest building approval data from the ABS highlights what we had been suspecting for some time, homeowners are electing to renovate and add value to their properties rather than throwing money away though stamp duty associated with purchasing a new home. </span></p>
<p><span>It is time for the NSW government to recognise this trend and review stamp duty levels. It is totally unacceptable that the government has allowed stamp duty levels to remain unchanged for 30 years. </span></p>
<p><span>A review of stamp duty rates would result in more transactions and would benefit not only residents of NSW but would act to increase revenues that are currently in decline.</span></p>
<p><em>John Cunningham is president, REINSW and can be contacted <a href="https://www.reinsw.com.au/imis15_Prod/web" target="_blank">here</a>. </em></p>
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Stamp duty hampers property transactions: REINSW

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<div>Total construction work done declined by a further 1.9 percent in the June 2016 quarter to $47.8 billion, to be 7.9 percent lower over the year. </div>
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<div>The result was driven by another 5.1 percent decline in engineering construction in the quarter - largely mining related - to leave this component down by 24.9 percent year-on-year.</div>
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<div><a href="/images/2016/08/25/A2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/08/25/A2.jpg" alt=""></div>
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<div>The building boom, on the other hand, continues apace. </div>
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<div>Although there has been a solid increase in alterations and additions (major renovations) lately, record building activity through this cycle has been overwhelmingly been driven by "other residential" building, specifically units, apartments, and townhouses.  </div>
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<div><a href="/images/2016/08/25/A3.jpg" target="_blank">Click to enlarge</a></div>
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<div><strong><span style="text-decoration: underline;">Mining cliff now 4 years old</span></strong></div>
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<div>Next month it will be fully four years since the so-termed "mining cliff" began. </div>
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<div>Interestingly engineering construction work done increased in the June 2016 quarter in Queensland, where most of the retracement has already taken place, while activity has actually trended up strongly in New South Wales and Victoria over the past year. </div>
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<div>I've long been warning that Western Australia would have to take its medicine sooner or later, and the reality check kicked in this quarter, with engineering construction crashing down to be some 48 per cent lower than one year ago. </div>
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<div>These figures confirm what has no doubt been obvious on the ground for some time - that the local economy is doing it tough as it passes through this painful slowdown period.</div>
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<div>Engineering construction work done has also fallen substantially in the Northern Territory over the last six quarters, including by a further 28 per cent over the past year, with only the massive Ichthys LNG project is holding this result aloft.</div>
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<div class="separator">The good news is that the decline in engineering construction is now thought to be around 80 percent complete, meaning that sooner or later this will stop being such a drag on the economy. </div>
<div class="separator"> </div>
<div class="separator">In fact, in New South Wales, Victoria, and now Queensland, it already has. </div>
<div class="separator"> </div>
<div class="separator"><strong><span style="text-decoration: underline;">Record building boom continues</span></strong></div>
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<div class="separator">The building boom and its associated multiplier effect has largely benefited the largest capital cities.</div>
<p><a href="/images/2016/08/25/A4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/25/A4.jpg" alt=""></p>
<div>New house building, while still increasing steadily in Victoria, Queensland, and South Australia, appears to have peaked for this cycle nationally.</div>
<p><a href="/images/2016/08/25/A5.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/08/25/A5.jpg" alt=""></div>
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<div>On the other hand the value of construction work done on attached dwellings was still tracking at record levels in the June quarter. </div>
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<div><a href="/images/2016/08/25/A6.jpg" target="_blank">Click to enlarge</a></div>
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<strong><span style="text-decoration: underline;">The wrap</span></strong><br><br>Residential building activity was still running at full pelt through the second quarter of the year, pushing up building costs in cities such as Sydney.<br><br>The Housing Industry Association (HIA) announced today that it believes that new home building will now decline for the next three years, with annual commencements falling from a peak of over 232,500 dwellings to 166,500 in 2018/19, with some downside risks to the forecast.</div>
<div> </div>
<div>The good news is that engineering construction will have already stopped falling significantly over the next 18 months.<br><br>Ichthys aside, most of the project-driven declines have now washed through the figures outside Western Australia.<br><br>Analysts expect to see moderate GDP growth in the second quarter of calendar year 2016 with net exports not making much of a contribution this time around.<br><br>On balance, though, the planned hand-off has been pulled off very well, with Australia now getting close to the bottom of its mining cliff.<br><br>Although resources regions have felt the pain, the largest capital cities have by and large pulled through relatively unscathed. </div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Record building boom continues: Pete Wargent

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<p><span>House renovators hoping for a quick profit run the risk of underestimating the cost of the flip.</span></p>
<p><span>But Cherie Barber, a professional renovator who runs a company providing renovation courses, remains optimistic about buying for renovation and sale.</span></p>
<p><span>Barber says it is always possible to renovate for a profit.</span></p>
<p><span>"You cannot talk about a single Australian market," she recently told <em>The Australian Financial Review</em>.</span></p>
<p><span>"There are more than 4000 suburbs and as many markets."</span></p>
<p><span>She says renovating to sell or hold depends on individual markets, which means analysis of the costs and benefits of the property, street and suburb.</span></p>
<p><span>Research suggest about 6 per cent of residential properties sold in Australia sold again in less than two years.</span></p>
<p><span>Across the country, CoreLogic RP Data noted homes that resold recently at a loss had an average length of ownership of 6.0 years.</span></p>
<p><span>Across resales of homes throughout the March 2015 quarter, those homes that were held for only a short period of time proved to be much more susceptible to loss.</span></p>
<p><span>Although home values increased over the past 12 months, 13.0% of owners who purchased and resold in the same year recorded a gross loss.</span></p>
<p><span>Any flip investment needs to estimate value the time involved and also the risks on the costs of acquisition, holding, renovating and selling.</span></p>
<p><span>Cherie Barber says she can complete a 10-day complete makeover of a house that would take other renovators between six and 12 months at double the cost.</span></p>
<p><span>She suggests not to pay the invoices in full until you are 100% happy with the works being completed.</span></p>
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The renovation flip is still doable: Cherie Barber

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<p><span>News Ltd have acquired a 25% stake in hipages, Australia’s most popular website for finding and hiring tradespeople. </span></p>
<p><span><a href="https://www.homeimprovementpages.com.au/" target="_blank">hipages</a></span><span> is the leading on-demand marketplace for hiring tradies in Australia, including plumbers, electricians, painters and builders.</span></p>
<p><span>Since its launch in 2004, the company has experienced significant growth year on year. David Vitek is co-founder and CEO of Hipages and Roby Sharon-Zipser, is the COO and co-founder of hipages.</span></p>
<p><span>It directly employs 200 people and helps over 65,000 verified tradespeople find work and get access to $1.35 billion worth of jobs generated annually.</span></p>
<p><span>"Our funding, comprising a combination of cash and advertising contra will help the business to further accelerate its growth and create greater brand awareness while providing our trades and services advertisers with a new platform with which to promote their businesses," News Corp Australia chief Peter Tonagh said in a statement on Monday.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>"For us this is an exciting investment and a key plank in our wider plan to expand and grow our property and home services business in Australia.</span></p>
<p><span>"More broadly, the investment follows our strategy of leveraging our large, highly engaged consumer audiences, and our deep relationships with advertisers, to expand our business into high growth."</span></p>
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News Corp Australia invest in tradies home improvement website

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<p>Renovation costs in New South Wales rose a sharp 8.11% year-on-year, compared to a national increase of only 1.48%, reveals a new report by services marketplace ServiceSeeking.com.au.</p>
<p>The Renovation Consumer Price Index (RCPI) is a quarterly report by serviceseeking.com.au, analysing 52,000 quotes submitted by tradesman on the website. The report compares the cost of renovating in Q2 FY16 versus the prior year.</p>
<p>For the report, the company used an interactive map that plots price changes across 10 popular renovation services in New South Wales year on year.</p>
<p>NSW was the only state to see a price increase in 10 out of 10 popular renovation services, in part because of trades shortage.</p>
<p>“We're now really starting to see the effects of a cooling property market" said CEO Jeremy Levitt. "As homeowners steer away from purchasing new property, they're investing in their existing properties through value-adding renovations which has pushed prices up.”</p>
<p>The average tradesman charges $64.09/hr, making NSW the second most expensive state to renovate a home (and now more expensive than Queensland).</p>
<p>Carpentry and building saw the largest price increases, up 26.26% and 18.48% respectively.</p>
<p>Although there were across-the-board increases, some services didn’t fluctuate much. For example, prices for electrical work increased 1.23% and concreting rose by 3.18%.</p>
<p><a href="https://www.serviceseeking.com.au" target="_blank">Serviceseeking.com.au</a> has more than 1.96 million jobs listed on its website to date with over 6.8 million quotes compared.</p>
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Home renovations jump 8% in New South Wales: serviceseeking.com report

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<p><span>After its disastrous ratings, Channel Nine has moved Reno Rumble out of its 7.30pm timeslot.</span></p>
<p><span>A new season of reality show Married at First Sight will replace the renovation program on Mondays and Tuesdays. </span></p>
<p><span>The program – made by The Block's producers - has damaged the stellar reputations of The Block's hosts Scott Cam and Shelley Craft.</span></p>
<p><span>Its first episode last Monday drew a 395,000 viewers, compared to MKR's 1.46 million to finish in fourth place. </span></p>
<p><em>Picture courtesy of 9jumpin.com.au</em></p>
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Reno Rumble cut from prime time

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<p><span>There's whispers a heritage art deco factory in Port Melbourne will be the venue of the next series of Channel 9's popular reality show, The Block.</span></p>
<p><span>The Block's producers are believed to have snapped up the imposing, heritage protected building at 164 Ingles Street from the BRW rich-lister Harry Stamoulis.</span></p>
<p><span>The $5 million deal follows its marketing late last year. <a href="https://dawkinsocchiuto.com.au/property/auto-draft-32/" target="_blank"><span>The listing website</span></a> suggests the property is under offer. </span></p>
<p><span>There had been rumours the one 2016 Block may have found a former icecream factory for its setting.</span></p>
<div class="cT-imageLandscape">
<img src="https://www.smh.com.au/content/dam/images/g/m/v/g/1/i/image.related.articleLeadwide.620x349.gmv0u7.png/1455685072530.jpg" alt="The Block's contestants will have to cope with heritage-building related restrictions next time around." title=""><p> </p>
<p><span>But the pinpointed Port Melbourne building is part of the former Velvet soap factory site of J Kitchen &amp; Co which became Unilever.</span></p>
<p><span>It was constructed in the 1920s as the factory's administration office.</span></p>
<p><span>The building, with a stepped-back main entrance, was among a larger holding purchased by Stamoulis for $25 million in 2013, with around 280 townhouses now under construction on the surrounding former Symex chemical factory site opposite the Port Melbourne Cricket Oval.</span></p>
<p><span>Estate agent Walter Occhiuto from Dawkins Occhiuto has the building as being under "contract" on its website.</span></p>
<p><span>The marketing campaign focused on the building's development potential for office or hotel accommodation. It was marketed as an outstanding building of 2355 sqm. It sits on a 1155 sqm block.</span></p>
<p><span>J Kitchen &amp; Sons commenced trading in Port Melbourne in the 1850s making such products as Velvet Soap and Electrine Candles from the tallow and other animal fats from the nearby slaughter yards. In the decades the company became Kitchen &amp; Lever then Unilever and most recently Unichema. </span></p>
<p><span>But back in the second half of the 1920s, into the 1930s, the company produced a journal called Advance.</span></p>
<p><span>The Port Melbourne Historical &amp; Preservation Society (PMHPS) have several editions in their collection.</span></p>
<p><a href="/images/2016/02/18/1925view-1.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/18/1925view-1.jpg" alt=""><br></span></p>
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<p><span>Advance Vol 2 No 7 from July 1925 featured their new Administration Offices saying '... the firm may well claim to have built one of the most up-to-date block of offices in the Commonwealth, combining loftiness, dignity and stability'.</span></p>
<p><span>Inside the main entrance the vestibule has a 'mosaic floor in a shining pattern, having the monogram of J Kitchen &amp; Sons worked into the centre".</span></p>
<p><br><a href="/images/2016/02/18/fourviews.jpg" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2016/02/18/fourviews.jpg" alt=""> </span></p>
<p>Interior fittings were of the highest order with doors built of <em>'polished maple and plate glass'</em>.<br><br>The second floor contained a <em>'spacious hall for social purposes designed to accomodate 700 people'</em> with a kauri dance floor.</p>
<p>The following edition of Advance in October 1925 included this photo of the opening of the Social Hall.<br><br><a href="/images/2016/02/18/opening.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/18/opening.jpg" alt=""></p>
<p><span>The company Social Club appears to have been very active with a library containing over 600 volumes, a tennis club, cricket club and football club who on the King's Birthday took on another great Port Melbourne company, the biscuit-makers Swallow and Ariel, at the Port Melbourne football ground.</span></p>
<p><span>The Block's last season saw contestants renovating the Hotel Saville, an octagonal building on the corner of busy Commercial and Punt roads in South Yarra.</span></p>
<p><span>The last series, won by Newcastle’s Dean and Shay, averaged 1.048 million viewers across its run.</span></p>
<p><span>Dean and Shay collected $755,000 when their penthouse apartment sold for $2.3 million.</span></p>
<p><span>Nine has revealed that the makers of The Block are yet to purchase a building for the next series.</span></p>
<p><span>The 2016 series of The Block won’t screen until the last quarter of this year. </span></p>
<p><span> </span></p>
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