Boost Your Home’s Worth With These Smart Renovation Strategies

Australians are passionate about transforming their homes, with national renovation spending reaching around $32 billion annually. But while enthusiasm is high, the real question is: do these improvements actually enhance a property’s value?

Most Popular Renovation Projects

Recent insights from Houzz reveal the top renovation trends among Australian homeowners. Kitchens lead the way, making up 23% of renovations, followed by living rooms (20%), bathrooms (17%), and laundries (17%). Interestingly, with the rise of remote work, about 10% of homeowners have been upgrading or creating home offices.

What Do Renovations Cost?

Renovation costs can vary significantly based on the project’s size, materials, and whether you’re hiring professionals or doing it yourself. Generally, major rooms like kitchens and bathrooms come with the highest price tags.

According to the latest Archicentre Cost Guide:

• A kitchen revamp might range from $15,000 to $43,000
• Bathroom upgrades can climb as high as $27,000
• Laundry renovations can hit around $17,000

Landscaping can also add appeal, though it isn’t always budget-friendly. For instance:

• Tree removal may cost up to $2,000
• Concrete driveways might cost $95 per square metre
• A full garden makeover with a landscaper could total around $4,000

Will Your Renovation Add Value?

When planning home improvements, it’s crucial to avoid overcapitalising—spending more on upgrades than you’ll recoup in property value. A good benchmark is to limit renovation spending to around 5% of your property’s value. So, for a $600,000 home, a $30,000 kitchen upgrade would be in line with this guide.

Eco-friendly choices like energy-efficient appliances can also make your investment more attractive to buyers, offering long-term utility savings.

Some upgrades don’t require huge spending but can still make a big impact. For example, improving natural light—by installing skylights, for instance—can make your home more appealing to nearly half of potential buyers, according to Finder research.

Outdoor improvements can offer strong returns too. Well-designed landscaping could increase your home’s value by up to 15%. But keep in mind that features like swimming pools may deter buyers due to ongoing maintenance needs.

The key is to understand what’s valued in your specific area. Consulting local real estate agents can help gauge the likely return on your renovation investment.

Renovations Aren’t Just About Value

While increasing resale value is often a goal, many renovations are about making a home more livable. With property prices rising, some first home buyers are looking at more affordable “fixer-uppers” with plans to improve them gradually.

Finder’s First Home Buyers Report 2021 found that nearly 4 in 5 first home buyers intended to renovate after moving in—a testament to the growing popularity of this strategy.

Funding Your Renovation

Planning a renovation involves more than design choices—it also means sorting out the finances. A mortgage broker can help you explore funding options, from refinancing your existing loan to taking out a personal loan. These choices can help preserve your savings, which is especially important in case of unexpected costs or budget overruns.