Homeowners and investors in Adelaide are turning their attention to renovations as the sales market continues to moderate, according to the latest market update from Herron Todd White (HTW).
Dwelling values remained resilient despite the market slowing down, said Jarrod Harper, local expert at HTW. In fact, figures from CoreLogic show that values in Adelaide rose by 0.4% in May, defying the downtrend across other capital cities.
However, homes in the city stay in the market for longer at 54 days on average. This is higher than the 45 days-on-market last year. Listing volumes also trended lower.
Harper said the slowing market helped shift the focus of homeowners and investors to renovation works.
"With an uncertain sales market, we may, in the short term, begin to see a trend where homeowners renovate what they have instead of seeking something else. This coupled with record low interest rates may provide the perfect excuse to get a project moving,” he said.
However, the motivations of homeowners to renovate are different from those of investors.
"For owner-occupiers, a lack of space during working from home arrangements may have forced the hand to give a renovation project the green light," he said.
Furthermore, Harper said owner-occupiers are willing to commence their renovation projects to achieve a level of comfort and amenity.
"The thought process is to spend now for what you want. In 20 years, the cost becomes negligible, and you have benefited in lifestyle from the works undertaken," he said.
For investors, the main motivation is to boost the appeal of their rental property, especially amid the slow market.
"Investors seek out properties with good bones that need as little capital outlay as possible. Simply put, owner-occupiers will attempt to fulfil both wants and needs while investors look to fulfil needs," Harper said.