Renovate or Move – How do you decide which is right for you?

Being in the middle of renovating myself, we decided that this was an interesting topic to reflect on for this week’s blog post.


Many of our clients come to the conclusion that they have outgrown their current homes and there are really 2-3 choices to deal with this. The first (most common & certainly not the best response) is to simply deal with it until the logic / pain kicks in and the real 2 options become apparent – stay put and renovate or move on and secure a more appropriate home now.


Coming to the decision as to which is right for you & your family will come down to a number of factors. These largely boil down to lifestyle choices and your budget at the time!  



The main points to consider.
When weighing up whether to renovate your current home or move on, you need to review the following:

Will the renovation be possible with Council planning guidelines?

Does your current address provide everything you need for your lifestyle (i.e., schools, shopping, local facilities, public transport)?

Are you prepared to deal with living in a building site while your home is renovated or are you prepared to move out & rent while you do the work?

Are you willing to dedicate the time and energy to supervise builders and contractors to see through the overall renovation plans?

If your answer’s yes to most of these questions, then perhaps it’s time to talk to a local architect and get into the finer details of what a renovation entails.


The renovator’s challenge

Costs: how not to overcapitalise and achieve exactly what you want – otherwise you are staying put for a long time while the market catches up with what you have done!

When weighing up the costs of renovating versus moving, it’s important to be realistic about what your home will be worth at the end of the renovation to ensure you don’t overcapitalise on the property.  

The team at R&W Seaforth will be delighted to guide you here without any obligation. – We are here for the long term!


You’ll need to do your homework and it may be prudent to join us at several local open for inspections to investigate the style of housing that appeals to the general market and the sale prices of similar renovated homes nearby.


From here it’s time to have your plans drawn up and put a price on them. Many suggest getting at least three quotes from reputable builders and if you are serious about going ahead with the plans, check their references thoroughly.

In order to cover the costs, you may also need to take out a loan (or extend your existing home loan) to meet the renovation costs. It’s best to speak to your lender/mortgage broker early on to make sure you have the available funds approved.

Local council approval – always important for structural changes!
No significant renovation can go ahead without approval from the local council or sign off from a private certifier with complying development - so talk to council early on in the process about your renovation plans to get an idea of the chances of being approved.


From here you may need to lodge a formal development application – this can take more time that you expect (sometimes up to six months in many cases longer) and needs to be factored into your decision.


Living through renovations

Having done this several times – this is a big step and one you have to be prepared for. It may mean months of living with building dust and materials in the front yard and contractors walking in and out of your personal space.

Living with one side of the house being open through winter is an interesting experience, some say character building. But no matter how difficult it seems at the time, once it’s all done – the hardship is very soon forgotten and you will enjoy the fruits of your labour for many years to come.

Depending on the type of renovations you undertake, you and your family may choose to (have to) move out of the home for a period of time which can add to your expense and needs to be factored in up front.


Your other alternative is of course to move!

If you:

Want features your current address doesn’t give you – like proximity to the Harbour, beach, schools, transport – etcetera.

Need a bigger garden/outdoor area to keep the kids under control.

Would like to be closer to family/friends or your renovation plans are significantly outside the scope of the local development control plan.

Then the decision to move maybe the right decision for you!


When doing your sums, you will need to consider the following:

Cost of new home versus renovating.

Stamp duty for a new property.

Refinancing fees as well as costs to exit existing loan.

Conveyancing/legal fees.

Real Estate agents commission and advertising/marketing fees.

Removalist charges.


While searching for some extra information I came across the following summary of advantages & disadvantages of renovating and moving on ANZ Banks website.


Renovating – Advantages Buy and Move – Advantages
By staying in the same property, you avoid the stress of a move and the adjustment required for you and your family in a new location, schools, etc. If you find a property that suits you and there is virtually nothing you will need to do to move in, you can start enjoying your home immediately.
You can design your renovations to exactly suit your needs. The decorating is also your choice! If you choose to buy and move, you avoid the discomfort of living in a dusty and uncomfortable environment.
You save selling, buying and moving costs, for example property stamp duty which can go towards the cost of renovations. You have peace of mind without the time, energy and stress frequently required with renovating.
  If you buy a new property, you have the certainty of knowing what your financial commitments are from the start.
Renovating – Disadvantages Buy and Move – Disadvantages
If you choose to move out while the renovations are being carried out, this can be costly, with 2 moves – out and back in again. Other costs could be temporary furniture storage and connection costs of services at your rental accommodation. For some people, a move can be a stressful situation. Unless you are buying in the same area, you will have to settle into a new community, new neighbours, new schools, etc.
There is a risk of cost blow-outs for the unexpected, so you may pay for more than you originally planned. You will have selling, buying and moving costs which could be put towards the cost of renovations.
Renovations, especially major renovations, are not for the faint-hearted. Renovations are generally very messy and often take longer than most people bargain for.  


At the end of the day, deciding whether to move house or renovate is a big decision and one that will come down to you and your family’s particular lifestyle needs, and the costs involved.


Our highly qualified & trained team are here to guide you through the sometimes stressful decision. Boasting many years and in fact – generations – of experience in-fact we understand the fundamentals that drive our local market, from units, townhouses and cottages to the harbour side lifestyle in magnificent waterfront estates. Having made the choices ourselves over the years we would be delighted to share our thoughts & experience of what will be in your best interest moving forward.


We look forward to seeing you at our opens and auction this weekend! Click Here for our inspection times.


Best Wishes,


The Team at Richardson & Wrench Seaforth Balgowlah.


To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 27/05/2010

Another tax for NSW

Last week we commented that there was a lot of news & no real impact on property from the implementation of The Henry Review.


It would appear that the Federal government may not be implementing much of the Henry Review, but the NSW State Governement are happy to go for another tax grab where ever they can sneak it in. As most will already be aware, a new property tax has been pushed through the NSW parliament, effective from the 1st of July 2010.  The tax announced by Lands Minister Tony Kelly was included in the Federal Budget and will be applied to properties selling for more than $500,000.


Starting from $200, the tax on a $1 Million property will be $1,000 & a higher rate of 0.25% of the purchase price will be charged for all properties over $1 million.


The Property Council of Australia has also urged the NSW government to reconsider the tax, stating that it will damage growth and investment. NSW acting executive director Glenn Byres has said “NSW has a fragile investment climate and construction levels are only beginning to creep back from 50-year lows. We should be looking to wind back taxes, not add to the burden of homebuyers and investors.”


It is unlikely that an extra $1,000 or even a few thousand is going to make a real difference to the property market, but it is still likely to leave a bad taste in purchasers mouths from the first of July.


Perhaps it’s a good reason to purchase the right property prior to the 30th of June!


Overall looking at the property market this week with a fiscally conservative budget & uncertainty remaining in Europe there should be enough data for the Reserve Bank to choose to pause on interest rates rises. Good news given the extra money you may need to find to hand over to the NSW government.


We look forward to seeing you at our opens! Click Here for our inspection times.


Best Wishes,


The Team at Richardson & Wrench Seaforth Balgowlah.


To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 13/05/2010

A lot of news, still waiting on any impact…

The Henry Review has ended up with surprising little on impact property – given the voluminous 138 recommendations; the expectation was for a far greater impact.

One of the key recommendations of the Henry Review related to the tax on savings and how the current legislation distorts people’s savings and investing behaviour. The Review focused particularly on current trends of negative gearing property taking advantage of the tax rules and how this has encouraged households to take on too much debt and risk when undertaking investments.

The review proposed a more consistent approach to taxing savings – with the specific recommendation being to apply a 40 percent discount to most interest income, net residential rental property income, capital gains and interest expenses.

The view was that our tax system actively encourages risk-taking and perhaps to an excessive degree. More problematic is that it penalises investors who are more cautious and risk averse.

With no changes at this stage being implemented, the current property trends are likely to continue unaffected by the Review, perhaps a different story for Western Australia who has seen their market driven largely by the mining sector. With the 40% tax grab on the mining industry’s profit, there may still be some ripples to be felt closer to home.

The trend for interest rates continued with the 6th increase in a row, taking the cash rate up another 25 basis points to 4.5%. As indicated in past blog posting this move starts to place interest rates back to the Reserve Banks (RBA) neutral territory with the Standard Variable loans now in the mid7%. It will be interesting to monitor if this is enough for the Governor Glenn Stevens & the RBA to pause and watch for full effect prior to any further interest rate movement. 

Australian Cash Rates 2006 - 2010

*The above graph from the SMH commentry on the May interest rates decision.

Supporting this is the Australian Bureau of Statistics (ABS) release of Retail sales having a lower-than-expected 0.3% to a seasonally adjusted increase to $19.92 billion in March from $19.85 billion in February, With retail sales being weaker than expected this may be enough to put rates on hold for a little while.

Today The RBA will publish its quarterly Statement on Monetary Policy where there are expectations that they will upwardly revise the medium-term forecasts for both inflation and economic growth.

As we saw pre-GFC the Reserve’s focus has been very strongly focused on keeping inflation firmly in the 2 – 3% range, hopefully this cycle they do pause to monitor effects rather than continue increasing till the cracks start to show in the economy. Most of us learn from our mistakes, but time tells all things.

Confidence in property has remained strong even with a number of new listings on the market; there is still a relatively low supply of properties for sale relative to the strong  demand. It has been interesting to note a number of buyers comments that they hoping for a couple more interest rate rises to knock out some of the competition, particularly in the lower price brackets.


Till we meet again, wishing you all the best in your property search!

The Team at Richardson & Wrench Seaforth/Balgowlah.


See you at the open for inspections: Click Here for our open times

To keep an eye on this week’s reported Seaforth real estate, Clontarf real estate, Balgowlah real estate, Balgowlah Heights real estate and North Balgowlah real estate Click Here*

*Sales are as reported by Australian Property monitors on 6/05/2010