Owner-occupiers in many parts of Sydney have taken advantage of the downtime amid the COVID-19 measures to begin their renovation projects, according to the latest study by Herron Todd White (HTW).
Matt Halse, local expert at HTW, said while it is not uncommon to see residential properties being renovated in the inner suburbs of Sydney, there has been a noticeable uptick in projects being commenced amid the COVID-19 restrictions.
"One of the reasons we anticipate minor renovations to be evident in the short term is due to people being locked-up at home and looking for constructive projects to complete around the house which will serve many purposes such as increasing the presentation of their homes and also providing much needed stimulation throughout this lockdown period," he said.
Halse said that even larger renovation projects have started to pick up as they engage builders and tradespeople at a potentially reduced cost.
According to a recent study by MCG Quantity Surveyors, builders have become more willing to sacrifice profit margins given the limited work in the pipeline.
"A slowing construction sector, low interest rates and lack of supply in many locations and sectors are likely to encourage renovation projects in the near future," Halse said.
Renovations in the investment space are also likely to continue, especially for dwellings with older styles. Halse said investors must consider this as potential tenants are presented with a wide range of options and reduced asking rents.
"It will be imperative that investment properties are presented in the best possible condition. Otherwise tenants will quickly choose a competing property in superior condition or alternatively demand a discounted rental price for any sub-par properties," he said.
Halse said it is a must for owner-occupiers and investors to understand their goals before renovating their properties. Some factors need to be considered, such as those in relation to possible heritage restrictions, planning limitations, site access, and the scope of works being carried out.
"Some other techniques to ensure renovations are not overcapitalising is by focusing on what the local market desires most, researching recent sales of similar properties and then ensuring the cost to do the chosen works does not blow out your budget or exceed the market value of the finished product," he said.