The rising cost of building materials is slowing, which is great news for owners planning to renovate and buyers looking to find fixer-uppers at a bargain price.
The pace of inflation and scarcity of building materials has seen many renovators and property bargain hunters back off for fear they could get caught up in a spiral of ever-increasing costs.
Construction costs moved only 1.9% in the December quarter, according to the latest data from CoreLogic’s Cordell Construction Cost Index. In the previous September quarter, prices had surged almost 5%.
Most experts believe that the retreat of owners and buyers has caused a dampening effect on the prices quoted by builders which is now feeding through to material suppliers.
Their theory is supported by data from the Australian Bureau of Statistics, which found dwelling commencements fell 5.2% to 45,489 dwellings in September 2022.
If you’re considering renovating before sale, it’s probably a good idea to start making your move. It always takes several months to get plans through council, and you don’t want to get caught in the crush of owners with similar ambitions.
For those seeking a fixer-upper, we believe you’ll be able to act with greater confidence as you tally the cost of purchase and renovation against market value.
Below, we’ve listed seven fundamental tips to ensure you enjoy an effective renovation.
Fit for purpose
While on the topic of building materials, don’t forget that conditions can be especially harsh, so only buy timbers and metals suitable for our climate.
Good bones
Ensure your property or target purchase is not about to fall down. An independent building inspection is essential before starting a project. You want good electrics and plumbing, and avoid water damage and rising damp.
Run the numbers
This is not a perfect science, but you need to be confident the property’s value will exceed the purchase and renovation cost. If not, it could take you several years to break even.
Write is right
A thousand decisions must be made once a renovation begins, and losing track of your goals is easy. So, write down your aims and maintain a strict budget. That way, you’ll be able to stick to the vision and avoid compromises or mistakes.
Forget me not
Integrate landscaping into your plan. Don’t make it an afterthought because you want a natural flow between indoors and outside.
Where to start
Begin with the big-ticket items, such as the kitchen and bathrooms. These are the most complex areas and will likely suck up most of the budget.
Contingency fund
Leave yourself an extra 15% in your budget to handle unforeseen problems. If you don’t have to spend the money, happy days! But at least you know you’ve covered yourself for emergencies.