Renovate or relocate

Home owners and buyers frequently discuss the question of whether to renovate or simply move when their home is no longer meeting their needs.

These are often difficult questions to weigh up, after all both require a considerable degree of effort, disruption and often cost.

Importantly owners have to consider the risk of over capitalizing because you won’t always recover the money spent renovating when you sell.

A review of data provided by the Australian Bureau of Statistics shows that whilst Victorians have spent more in real terms than ever before on dwelling alterations and additions they are more likely to buy a new home than renovate.

Over the last 30 years the high point was in 1996 when 22 per cent of all the money spent on residential construction work was on renovations. It reached a low point of 13 per cent in 2010 before it commenced rising again. Over the past three years the real value of work done has risen 17 per cent to reach a share of 14.5 per cent last year.

As this metric is the share of overall work an important factor is the overall building activity.

The fact is that Victorian builders have been very busy over the last three years, they have completed 24 per cent more homes than they had in the preceding three years. This provides Victorians with greater choice when considering the question of renovating or moving. Those making that choice will find that there is a ready supply – better than has been the case for a long time – of new homes which may be more attractive than renovating.

Courtesy of REIV.com.au