medialaunch.com.au

 

Interest Rate Rises Make Renovation Cost Control Vital
Summary
 





 



21/10/2009

Archicentre News Release

21 October 2009

Interest Rate Rises Make Renovation Cost Control Vital

Archicentre, the building advisory service of the Australian Institute of Architects, is urging home owners to take a conservative approach to renovating and not over-capitalise their properties based on predictions of up to 20% jump in property values over the next three years and increased interest rates.

Upper level framing taking shape on a renovation.

David Hallett, Victorian State Manager of Archicentre said whilst design, budgets and cost controlling are not at the sexy end of renovation, they are the things that will make people money on renovation projects.

"More than half of all Australians renovate at some point in their lives with the hope of generating extra non taxable income when they sell the family home, the principal place of residence.

"If home owners get the renovation design wrong they can end up spending tens of thousands of dollars to devalue their home or reduce its market appeal.

An example is the young couple who turned a three bedroom home into a two bedroom home by building a new large bathroom and walk in robe at great cost.

"When the couple called the real estate agent to sell the property they were stunned to find the removal of the third bedroom had devalued their property by between 10% -15% as they had made it unmarketable to families with more than one child - thus a large part of the market."

Mr Hallett said renovators pouring money into expensive fittings such as highly expensive taps and whitegoods in the kitchen and bathroom areas can often find they add little or no extra value to the sale of the home, cutting into the financial return.

Archicentre is urging caution for home owners to ensure they maximise their profit return by doing their homework and not bank on forecasts of property values.

"For many cashed up home owners the renovation of the family home is often the last roll of the dice to substantially increase their wealth in retirement by investing in the family home which becomes a tax free investment when ultimately sold."

A discussion paper for the Rudd Government's Pension Review earlier this year outlined a bleak future for Australia's ageing workforce, with the majority of 80% of Australians aged 65 and over getting the pension and relying on it as their major income source.

"With a quarter of Australia's population expected to be 65 or more by 2047, the use of equity in the family home to boost retirement funding through renovation has become an important national wealth creation strategy as well as underpinning jobs."

Archicentre is urging home owners who are considering renovating as a way of generating savings or boosting their retirement funds to make sure they do their homework on the design of the renovation, cost, tendering and management of the project.

"Undertaking a renovation is like running a small business by dealing with the many suppliers, tradespersons, and gathering the materials, fixtures and fittings.

Archicentre has polled its membership of over 800 architects on what requests their clients were making to improve their homes through renovation.

Kitchen Trends
  •   Drawers not cupboards 81.7%
  •   Large island benches 77.2%
  •   Walk-in pantries 58.0%
  •   Concealing appliances 50.2%
  •   Colourful splashbacks 35.6%
  •   Computer data points 22.8%
  •   Concealed food preparation area 20.5%

  • Master Bedroom Trends
  •   En suite 93.2%
  •   Walk-in-robe 85.4%
  •   Deck or balconies 57.5%
  •   Study 28.8%
  •   Freestanding furniture (sofas) 17.8%
  •   Bidet 7.3%

  • Bathroom Trends
  •   Frameless showers 80.8%
  •   Double basins 54.8%
  •   Separate powder rooms 50.2%
  •   Baths 48.4%
  •   Double showers 37.9%
  •   Concealed cisterns 37.0%
  •   Heated floor 37.0%
  •   Free-standing baths 30.1%
  •   Views of internal courtyard 28.8%
  •   Spa baths 13.7%
  • Renovation - achieve a successful result. Archicentre has a Do It Yourself Guide for the Home Renovator which can be downloaded from the Archicentre website at http://www.archicentre.com.au/survival_kit/diy_home_reno2008.pdf

    Archicentre is conducting a free seminar on renovation for home buyers and renovators.

    6.30pm - 8.30pm Tuesday 10 November 2009
    Renovating - Ten Things You Should Know About Renovating Before You Start

    Venue: Yarraville Club, 135 Stephen Street, Yarraville.
    The seminar will provide everything you need to know about the design and construction of your renovation, including planning, permits, pit-falls and a case study of a completed project with time for questions as well.
    For bookings please call 1300 13 45 13.

    ww.archicentre.com.au

    Media Enquiries:
    David Hallett, Victorian State Manager Archicentre (03) 9819 4577 Mobile: 0439 439 115
    Ron Smith Corporate Media Communications Archicentre (03) 9818 5700 Mobile: 0417 329 201

     

     


     

    Medialaunch.com.au Pty Ltd
    Copyright © Medialaunch.com.au 1999. All Rights Reserved.
    PO Box 2412, Kew, Victoria, Australia. 3101
    Tel: +61 03 9818 5700 Fax: +61 03 9818 5044
    Email:newsdesk@medialaunch.com.au

    Copyright/Legal