Spring Time Renovations

Winter is coming to an end and spring is finally in sight! While it’s been cold outside we’ve been rugged up inside planning home upgrades for when the weather improves - and the market has not slowed down at all. On the topic of home upgrades and renovations, let’s take a look at how the revitalised and reno-ready property markets have been performing lately.?

The property market in Western Australia remains robust, making it challenging and costly to secure houses, particularly in established suburbs. This has resulted in a heightened interest in properties with renovation potential, where older homes present significant value-add potential. Mid-range properties valued between $500,000 and $800,000 with the potential for renovation attract a broad market segment due to the affordability at this price point.

Buyers are motivated by the prospect of increasing property value through renovations, leveraging the affordability and potential for growth in these mid-range properties. This trend reflects a strategic investment approach amid limited housing options, allowing buyers to achieve their property goals in a more cost-effective manner.

In response to the housing crisis, tight rental market, and rising property values, the state government introduced a Vacant Property Rental Incentive Scheme to boost rental supply, potentially impacting the number of properties available for renovation as more owners opt for rental incentives. Despite this, opportunities for profitable renovation projects persist, particularly in mid-range properties and high-demand suburbs, where lower entry costs and high post-renovation demand offer better returns.

For example, Kelmscott, an established area with typical older-style properties built in the 1970s on approximately 800 sqm of land, currently has some of the highest price growth rates in the Perth market. This growth is driven by affordable property prices and strong rental yields.

Consider 1 Mimosa Court, Kelmscott, a 4 bedroom, 2 bathroom house built in 1976. This property, encompassing 136 sqm of living space on a 702 sqm lot, recently received extensive renovations, including new flooring, kitchen, and bathrooms, along with freshly painted internal walls. It sold for $680,000 in April this year, marking a substantial increase from its previous sale price of $320,500 in 2022, demonstrating impressive growth of over 110%.

Let's move a little bit west to Camillo, another established area with typically older-style properties built in the 1980s, which provide an attractive option for renovators.?

For example, 4A Ainsley Court in Camillo is a duplex unit featuring 3 bedrooms and 1 bathroom with 89 sqm of living space. This property underwent extensive renovations recently, featuring new flooring, a modern kitchen, upgraded bathroom, and freshly painted internal walls. Initially listed in March 2023 in 'as is' condition, it included all abandoned possessions and lacked a front door and windows, it sold for $140,000 after just 3 days on the market. After renovations, it was listed back on the market and sold for $460,000 in June 2024, demonstrating impressive growth of over 220%. The property is now rented for $580 per week after being on the advertised for just 9 days.

Heading north of the city to Hillarys, you will find a diverse range of properties including spacious family homes, modern apartments, and luxurious waterfront properties with varying land sizes, typically between 600 - 800 sqm for single dwellings, with some prestige properties featuring even larger allotments.

8 Hicks Way in Hillarys for example is a 3 bedroom, 1 bathroom house, built in 1971 and features 128 sqm of living space on a 685 sqm lot. Recently, the property underwent significant renovations, including new flooring, a kitchen and bathroom, and freshly painted interior walls.? These upgrades helped it achieve an impressive sale price of $1,040,000 in June this year, marking an increase of over 55% from its previous sale price of $670,000 in September 2022.

Let’s shift our focus to the apartment/unit market. Apartments and units are becoming an increasingly more viable option for buyers given the lack of supply and high levels of demand in the broader market. Well-located apartments and units in the Perth CBD and inner-city suburbs are attractive to both owner occupiers and investors alike. The increased interest in these properties is driven by their strategic locations, relative affordability compared to houses, as well as the appeal of the lock up and leave lifestyle for owner occupiers, and the attractive rental yields on offer for investors. Buyers are therefore willing to pay more for move-in-ready properties that offer convenience, security, and predictable costs.

Consider this unit in Subiaco - 1/11 Heytesbury Road. This 3 bedroom, 1 bathroom unit, built in 1979, has 79 sqm of living space in a complex of 12 units. It recently underwent major renovations, including new flooring, a new kitchen and bathroom, and freshly painted interior walls. The unit sold for $850,000 in May this year, an increase of over 48% from its previous sale price of $573,500 in July 2022.

Additionally, 203/29 Melville Parade in South Perth is a 52 sqm, 1 bedroom, 1 bathroom studio apartment within a complex of 45 units was built in 1964 and recently underwent partial renovations, including new carpet, a new benchtop, some kitchen appliances, and freshly painted interior walls. The apartment sold for $370,000 in May this year, marking an increase of over 34% from its previous sale price of $275,000 in November 2023.

Let’s now take a look around the state, starting from the top of the Kimberley region in Broome. Given the high costs of construction experienced in regional WA, property owners in Broome are hesitant to build and are more inclined to buy an older house and take on a renovation project instead. There is limited supply available of fully renovated houses on the market as these properties are tightly held by their owners.?

Take for example this 2004 built, 3 bedroom, 1 bathroom property at 11 Bilby Way, Djugun located in the desirable Roebuck estate. The property features 102 sqm of living on a 452 sqm lot. The property has been partly renovated with a new bathroom and sold in March this year for $528,100. The property previously sold for $480,000 in 2022 portraying a growth of 10%.?

Shifting down the coast to Port Hedland there is a significant skilled labour shortage and it is therefore difficult to secure trades, resulting in increased construction costs and long lag times for building brand new homes. Consequently buyers are prepared to purchase a renovated home, and homes requiring renovations are increasingly desirable. The buyer profile for this product is typically owner occupiers with some investors looking for properties that present well and offer good rental yields. The supply of renovated properties available on the market is also constrained.?

Take for example this 4 bedroom, 1 bathroom 1972 built property at 15 Lawson Street, South Hedland. The property features 129 sqm of living on a 775 sqm lot with extensive renovations completed with a renovated kitchen and bathroom. The property sold in April this year for $440,000 and previously sold in 2019 for $270,000 showing 62% in growth.

Additionally, this 1977 built, 3 bedroom, 1 bathroom property at 3 Lovell Way, South Hedland sold for $603,000 in April this year and has been renovated with brand new flooring, as well as kitchen and bathroom renovations. The property previously sold for $277,000 in July 2020 showing a growth of over 100%!

Situated in the Pilbara region, Karratha is a town that is heavily reliant on the resource sector. Considering the escalated costs of building supplies and labour required for constructing new homes in the Pilbara region, buyers are inclined to pay more for a renovated home than build, and renovating their current homes is an increasingly viable option. Buyers are especially keen to pay a premium for properties that feature a swimming pool or workshop.?

This 1982 built, 4 bedroom, 2 bathroom property at 4 Goddard Place, Nickol features 151 sqm of living on a 705 sqm lot. The property has undergone extensive renovations with a new kitchen, bathroom, flooring, LEDs, window furnishings and a fresh layer of paint. The property sold in May this year for $630,000 and previously transacted for $460,000 in February 2021 portraying 37% in growth.

This property at 5 Nickol Road sold for $550,000 in May this year. The property features 4 bedrooms, 2 bathrooms on a 750 sqm lot with 140 sqm of living built in 1982. The property features a workshop and has been partly renovated with a new bathroom and ensuite. The property previously sold for $400,000 in 2021 indicating 38% growth.

Moving down to the midwest coast, Geraldton is recognised for its surreal sunsets, windy weather and stunning shoreline. The COVID-19 pandemic influenced many homeowners to renovate their properties with agents confirming that some of these properties are now coming onto the market. Geraldton experiences less barriers with transportation of the supply of construction materials and has less shortage of skilled labour due to its proximity to Perth in comparison to other regional centres. The constrained supply of properties available in the market, particularly renovated houses within the last 2 years has increased the appetite for renovated homes, and the demand is high.?

This 1953 built 2 bedroom, 1 bathroom property at 204 First Street, Wonthella features 105 sqm of living on a 1,012 sqm lot. The property has been renovated with new flooring, freshly painted walls, new window treatments and an updated kitchen. The property has the ability to be subdivided and sold for $315,000 in March this year. The property sold in 2022 for $195,000 indicating 62% in growth.

Furthermore, this 1966 built 3 bedroom, 1 bathroom property at 317 Banksia Street, Rangeway features 85 sqm of living on a 799 sqm lot. The property has been fully renovated with a new kitchen, bathroom, flooring and freshly painted walls. The property sold for $260,000 in May this year and was previously sold for $95,000 in November last 2023 demonstrating expansive growth in just 6 months.?

Heading inland, the Wheatbelt region has experienced consistent growth throughout the year. The scarcity of quality properties in this rural area is driving increased interest in property renovations, attracting both investors and homebuyers who are seeking potential growth opportunities and the charm of rural living.

Take 8 Dick Street in Northam as an example. This 3 bedroom, 1 bathroom house, constructed in 1940, offers 109 sqm of living space on a 1,231 sqm lot. The property recently underwent extensive renovations, which included new flooring, a kitchen and bathroom, and freshly painted interior walls. These improvements led to the sale price of $265,000 in April, reflecting a significant increase of over 63% from its previous sale price of $162,000 in January 2023.

Consider 38 Lobelia Avenue in Wundowie. Built in 1955, this 2 bedroom, 1 bathroom house spans 88 sqm of living space on a 1,012 sqm lot. Recently, the property underwent extensive renovations, including new flooring, a renovated kitchen and bathroom, and freshly painted interior walls. These upgrades contributed to its sale price of $470,000 in April, marking a notable increase of over 220% from its previous sale price of $145,000 in March 2021.

Taking a look at the Goldfields region, Kalgoorlie has experienced a heated residential market for an extended period of time with high levels of demand. Owner occupiers are predominantly the main buyers of renovated homes as the cost to build new houses combined with the lack of available trades makes building a less viable option. Investors are typically looking at the lower segment of the market and are not as eager to purchase renovated homes, particularly due to the higher price point.

Check out 17A Boundary Street, South Kalgoorlie for example, this 3 bedroom, 1 bathroom 1945 built property features 131 sqm of living on a 451 sqm lot with internal renovations including new flooring, kitchen, bathroom and external renovations with painted facade and updated landscaping. The property sold for $359,000 in May this year and previously transacted for $165,000 in 2021 demonstrating exponential growth!

This 1981 built, 3 bedroom, 1 bathroom property at 11 Hampden Street, South Kalgoorlie sold for $363,800 in May this year. The property features 93 sqm of living on a 730 sqm lot with new flooring, kitchen, bathroom and was freshly painted. The property previously sold for $185,000 in 2019 portraying 97% in growth.

Let’s move our focus now to our South West region, where property prices have consistently been driven up throughout the area over the past few years. Narrowing our view, the greater Bunbury area in particular has seen incredible growth as home buyers and investors have flocked to the area, seeking good value for money as an alternative to metropolitan Perth in light of the significant affordability issues at present.

With median house prices soaring, attractively priced dated homes that could serve as prime renovation projects can be very tempting opportunities.

Take 13 Lucretia Street in the suburb of Eaton for instance. This two storey 5 bedroom 2 bathroom 1975 built home was purchased last year in August for a “cheap” $390,000 when the median house price in the locality was $415,000 (and approximately $473,000 across greater Bunbury). After a complete internal and external makeover, the home sold again in May this year for $750,000. In a suburb that has seen approximately 20% growth over the last year alone and with a current median house price of $493,000, the 92% increase in value (even taking into consideration renovation and selling costs) definitely shows the profound interest in the area for quality products and the power of a revamp!

Further inland, Margaret River township has a range of property including modern builds, older solid brick homes and, for those who like character cottages with the cosy comforts of yesteryear, opportunities do arise to purchase ones that have already seen restoration and refurbishment, and those ready to be brought into the 21st century.?

Such is the case for 2 Coronation Street, Margaret River, a 2 bedroom 1 bathroom 1950s fibro cottage on a 577 sqm lot that has been well maintained over the years, presenting in mostly original condition with minor improvements such as split system air-conditioning, and offers a great starting point for those looking to enter the market now. Currently it is being offered for sale at “offers over $650,000”.

For those with a little more funds and the desire to develop, Margaret River also has a number of character homes that are on larger, sub-divisible lots.

Though now a slightly dated sale, it would be remiss not to mention the sale of 77 Forrest Road in Margaret River which sold in January for $800,000. Sitting on 899 sqm, the 1990 built 3 bedroom 1 bathroom home was purchased two years prior in January 2022 for $635,000 and subsequently received a clever refresh of new flooring, new window treatments, painting and new appliances, while costs were saved in other areas such as painting existing kitchen cabinetry - the result was a complete face-lift and a 25% increase in value!

Finally, for something a little different, we have the sale of 24 Brockman Highway in Karridale. Approximately 30 km south of Margaret River and originally built in 1960, this 1 bedroom 1 bathroom home is actually a converted church which, up until its sale in February for $625,000, had been used as a Moroccan style short-stay accommodation.

Following the coast down to our ‘Great Southern’, the regional town of Albany is home to an abundance of affordable, dated, original condition housing that poses an attractive opportunity for those seeking a viable investment in the renovation space. Renovation activity in the area has shown that even a dated home can have a competitive edge in the market once touched up with a modern lift.?

In the greater Albany suburb of Spencer Park, resides this 3 bedroom, 1 bathroom circa 1970’s built home featuring a significant renovation makeover performed by the previous owner post purchase in 2021. Previously bought in “original” 1970s condition for a low $280,000 in January of 2021, this home has since undergone new flooring, paintwork, kitchen and bathroom fitouts allowing for a completely modern lift to the internal space. The property was sold earlier this year in February for just shy of half a million at $490,000, displaying a 75% increase.

Located only minutes across town in Mount Melville, is this 3 bedroom, 1 bathroom, circa 1960s built double story cottage with views over the town. Currently operating as an AirBnB, this property was sold for $365,000 in June of 2021 with plans to refresh the property into a more appealing holiday destination. Renovation works undertaken include internal painting, as well as a new kitchen, bathroom and laundry. The property was sold for $495,000 in March of this year, demonstrating a 35% increase after the internal renovations.

Along the coast in the town of Esperance, is another great opportunity for investors seeking generous growth as there are plenty of older, original condition retro style homes on the market that have the ability to generate large returns. However, undertaking a project in this area is not for the faint of heart, as the remoteness of the town means a lack of tradespeople and difficulty in sourcing building materials, which creates challenges for those looking to undertake a renovation project.

Purchased for a highly affordable $190,000 in December 2019, this circa 1980s built brick home comprises 3 bedrooms, 2 bathrooms on a generous 792 sqm block. Found in its original 1980s style from a pine kitchen to dated carpets, this buyer has completely transformed this space into a fresh, modern space creating the feel of a brand new home. With internal and external works including a new coat of paint, modern tiled flooring, kitchen and bathroom, this extreme makeover has generated an attractive return on investment as it was then sold only a few years later for $445,000, displaying a whopping 134% increase!

Currently on the market is this perfect example for those looking to take on the challenge. Check out this circa 1970s built character brick home maintained in its original condition and ready for the right investor to bring it back to life. Located at 23 Mungan Street, this property is currently listed on the market for $400,000 and comprises 3 bedrooms, 1 bathroom with an internal living area of 99 sqm on a spacious 1,012 sqm block of land where opportunities are endless!?

The renovation market can be a goldmine for the savvy buyer, with many run down options on the market ripe for revival, proving to be profitable for both investors and home buyers alike, particularly as a good entry level product that can be improved over time as funds allow. It goes without saying though, that due diligence must be front of mind before embarking on any renovation project and if you have any queries or would like to discuss things before making any decisions, our team is always available.

Chris Hinchliffe Director