SURGING property prices are putting Gold Coast homeowners off buying again, with many opting to instead spend money on renovations.
According to research compiled by Master Builders from Australian Bureau of Statistics data, between 2014-15 there was a 14.2 per cent increase in the value of renovations on the Gold Coast with the sector worth $120.6 million.
That is backed up by information supplied by hipages.com.au, a website for hiring tradespeople, which shows big increases in the number of people logging jobs on the Gold Coast.
Key hot spots included Elanora and Ormeau where there were increases of 100 per cent and 88 per cent between the first quarter of 2015 and the same period this year.
Hipages founder Roby Sharon-Zipser said families were deciding to renovate rather than buy a new property due to recent price increases.
“This is particularly true for families with kids, who probably want to stay in the area they’re in because of school catchments areas and they fear if they sell they won’t be able to get back into their suburb of choice,” Mr Sharon-Zipser said.
“If you sell, where do you move to? But if you’re willing to spend a few thousand dollars you may be able to get the better home you want.”
In Elanora the median house price has jumped by 6.6 per cent to $565,000 for the 12 months to January while in Ormeau it increased by 2.6 per cent to reach $450,000.
Mr Sharon-Zipser said the average amount spent on renovations was $3000 to $4000 while popular features for homeowners to upgrade included decks and outdoors areas.
“Decks are popular and it’s synonymous with the Aussie way of life,” he said. “Improving outdoor areas is also an easy and cost effective way to increase the value.”
Hennessy Building Projects owner Aaron Hennessy, whose company specialises in renovation projects on the Gold Coast, said homeowners were staying put rather than going to the market, preferring to use the equity gained in their properties to obtain loans for renovations.
“A lot of the feedback is they (homeowners) like the area they are living in, prices are going up, and they have equity to spend,” he said.
He knew of a couple in Palm Beach who had purchased a property for $320,000, which was now valued at around $700,000.
“Now they have a few hundred thousand in equity to spend on renovating.”
The average cost of a renovation his company undertook was $400,000 with the most popular features for people to upgrade including bathrooms, kitchens and outdoor entertaining areas.
“I think a lot of people are doing it to build their family home, bring their kids up and sell later.”
Master Builders regional manager John Duncalfe said the surge in renovations was due to increasing consumer confidence amid a buoyant local economy.
“Basically there is more consumer confidence now,” he said. “People are saying, ‘we have held off for so many years, now is the time to do the kitchen or bathroom’.”
Mr Duncalfe said the sector was strong “across the board” but doing particularly well in waterfront suburbs like Runaway Bay.
He said demand for renovations was so strong that it had led to a shortage of labour.
Matthew Keenan and his fiance Lauren Gill are busy renovating their first home.
The pair, who spent $483,000 on a three-bedroom Varsity Lakes house in December, decided during their property search they would renovate.
“We were trying to decide if we wanted to use all of our deposit and purchase a home, or keep saving and have a renovation budget to go alongside our deposit,” Ms Gill said.
“The idea of being able to buy something and make it better and increase the value for resale later on really appealed to us.
“We are getting married next year and plan to have a family one day, so we are making our home fresh and comfortable for the future.”
The pair are spending about $30,000 on renovations.
“We have put in a lot of the renovation work ourselves and where we have been able to save costs, we have done so,” Ms Gill said.
“We decided to spend money on quality appliances, thick stone benchtops with waterfall edges and great quality tiles.”
Ms Gill, 30, said it was the design of the house that attracted their attention.
“We chose to purchase this home as the bedrooms are at the opposite end to the lounge-meals-entertaining area and once we found out the kitchen wall wasn’t load bearing, that’s when we decided to completely redo the kitchen area to create an open plan layout,” she said.
“There have been some challenges like not having had a kitchen for over six weeks so far and layers of dust covering everything.
“But we have made some cost savings through completing work ourselves, such as skirting boards, painting and removing the old kitchen and floor.”
The pair said they loved the industrial and Scandinavian look and hoped to achieve that in their home.
Originally Published On: http://www.goldcoastbulletin.com.au/