FIXER-UPPERS are set to be in hot demand across Brisbane as homeowners seek to cash in on the renovation component of the $25,000 HomeBuilder grant.
Experts say the COVID-19 lockdown has already sparked a surge in home improvements, and the federal goverment stimulus package will only fuel this demand, and push those who are considering purchasing a renovator property to buy now and start work.
New research from Realestate.com.au reveals ‘renovation’ related properties for sale account for 12 per cent of all listings on the property site — and one of the suburbs with the most homes prime for renovation is in Ipswich.
Sadliers Crossing is among the top 10 suburbs for renovator homes in the country, with 58 per cent of listings classifying as having the potential for renovation — and you can pick up a fixer-upper in the suburb for under $300,000.
Half or more of the properties for sale in Petrie Terrace and Herston also have the potential to be renovated, but you can expect to pay a bit more for their inner-city postcodes.
While the HomeBuilder grant has come under fire from critics who claim the eligibility criteria is too strict, Herron Todd White director David Notley said for those who did qualify, the grant offered a significant boost and made tackling a renovation project much more enticing.
“For those with the financial capacity to upgrade their home or investment, making improvements not only boosts the property’s liveability, but it can add value too,” Mr Notley said.
Figures from MCG Quantity Surveyors reveal homeowners have spent more on renovations since the COVID-19 restrictions were introduced.
The average spend on an established house in Queensland since March was $46,654 — up from $26,457 at the same time last year.
Minister for Housing and Assistant Treasurer Michael Sukkar said this week that more than 16,500 Australians had registered their interest in the grant.
To be eligible, the value of the renovation contract needs to be between $150,000 and $750,000 and the property value cannot exceed $1.5 million.
But construction must be contracted to start within three months of the contract date and applicants will be subject to income caps of $125,000 for singles and $200,000 for couples.
Brisbane couple Alycia and Nick Chapman qualify for the renovation component of the HomeBuilder package and plan to use the $25,000 to press ahead with their current project in Clayfield.
“We purchased this house almost 12 months ago and always had the plan to raise and build underneath,” Mrs Chapman said.
“We were just getting around to that part when COVID hit. We had the plans drawn up, but decided to put everything on pause.
“So when this came out, we found out we could qualify and that’s been the driver to get us to continue with the project.”
Mrs Chapman said she believes investing in a major renovation will pay off eventually, regardless of the market conditions.
Once the renovation is finished, the couple plans to sell when the time is right and move on to another project.
“I know (the HomeBuilder package) is restrictive and there’s not many people who can qualify for it, but I think it’s going to do what it’s set out to do. When we talked to our subbies and tradies, they were all happy to be able to get some work again.”
Realestate.com.au chief economist Nerida Conisbee said it was “highly likely” the HomeBuilder scheme would increase demand for fixer-uppers, but home renovators needed to move quickly as the grant was only available for a short period of time.
“Given that it usually takes a little while to buy a property, this could be a challenge,” Ms Conisbee said.
“One consideration for potential renovators is the price of the property. If you are renovating an existing property it needs to be valued at less than the national price cap of $1.5 million. This will exclude many suburbs in inner Brisbane.
“The other important point to remember is that investment properties are excluded. This means that you can’t buy a property to renovate to rent out.”
For those looking for a potential fixer-upper in Brisbane, Mr Notley said the inner-west suburbs of Paddington, Auchenflower, Bardon and Toowong offered some of the best renovation opportunities.
Mr Notley said a perennial favourite for fixer-uppers was the suburb of Petrie Terrace and neighbouring Spring Hill.
“There are some raw homes on tiny lots for over $600,000, but it’s all about location here,” he said.
“These suburbs are literally walking distance to the centre of town as well as entertainment and retail precincts.
“And the results can be spectacular.”
For example, a renovated four-bedroom, three-bathroom home on 228 sqm at 35 Sheriff St, Petrie Terrace sold in November 2019 for $1.19 million.
Mr Notley said Wavell Heights in Brisbane’s northern middle ring also had some good options, with basic renovators in average positions fetching between $550,000 and $600,000.
“But you need to be fast as they sell quickly,” Mr Notley said.
“Other homes in Wavell Heights that are in quieter positions with ready access to facilities
are fetching between $600,000 and $700,000 for a renovation prospect.
“In these instances, smart renovation work will yield an end value above $1 million.”
Mr Notley said the work-from-home phenomena during COVID-19 was also fuelling a spike in renovations, as more people build or improve their home office spaces.
He said creating a work area shut off from family spaces would become a must-have for homebuyers.
“If there’s an efficient, cost-effective way to establish an office, then vendors will want to do this prior to selling,” he said.
Nick Given of Ray White New Farm is marketing the perfect renovation opportunity at 60 Abbott St, New Farm.
Mr Given said it was rare for such properties to come up for sale in the sought-after suburb and he had received strong inquiry for it.
“The attractive thing about a property like Abbott Street is that there’s only so many renovators left in New Farm,” Mr Given said.
“This particular one is a very raw, blank canvas and a really good platform to do a great build on it.”
Raine & Horne executive chairman Angus Raine warned homeowners not to treat Home builder as a gift.
“If you have equity in your home and the renovation adds value, then opting into Home builder makes plenty of sense,” Mr Raine said.
“Typically, a new kitchen or bathroom augments a property’s appeal, while extra accommodation or a second story will also add to the capital value of your property.
“With interest rates also at historic lows, the $25,000 Home builder grant will make renovating a sensible strategy for homeowners, especially if they are planning a sale any time soon.”
THE BRISBANE SUBURBS WITH MOST ‘RENOVATOR’ HOMES FOR SALE
Suburb % of total listings
1. Sadliers Crossing 58%
2. Petrie Terrace 53%
3. Herston 50%
4. Newtown 50%
5. Grange 47%
6. Mount Gravatt 45%
7. Keperra 44%
8. Wavell Heights 41%
9. Jindalee 41%
10. Camira 41%
(Source: Realestate.com.au)