With residential property values sluggish or falling in Sydney and Melbourne, those thinking of moving traditionally stay put in this climate and renovate their existing homes. It’s not bad strategy. Wait for the market to pick up while customising your home to meet your changing needs and take advantage of lower prices from tradespeople and builders suffering from the downturn.
But if this is the course you’re thinking of taking, tread carefully. Will extending give you what you want, or is it better to move to a new property with more potential, no matter the state of the market? Would extensions add enough value to your house to cover their cost? Or does it matter? Finding the answers requires weighing up questions of lifestyle with investment.
Overcapitalising and how to avoid it.
Overcapitalising results when what you’ve paid for the house (purchase price plus renovation costs) totals more than you could sell it for….more