Booming House Prices: Should You Buy and Sell or Renovate?
The Perth property market is buzzing. With house prices surging and demand continuing to climb, many homeowners and investors are asking themselves the same question: “Should I buy a new property or renovate my existing one?” Both options have opportunities—but also hidden costs and challenges that are often overlooked. In this post, we’ll break it down so you can make an informed decision.
The Reality of Booming House Prices
Perth has experienced a significant rise in property values in recent years. This creates opportunities for homeowners but also adds pressure for buyers.
- Buyers face rising prices, limited inventory, and fierce competition.
- Homeowners may leverage their property’s value to fund renovations instead.
Understanding the full financial and time commitment of buying is crucial before making a move.
Option 1: Buying a New Property
Buying a home might seem straightforward, but in a booming market like Perth, the reality is often more complicated and expensive than expected.
The Hidden Costs of Buying
1. Stamp Duty
- In Western Australia, stamp duty can easily reach $15,000–$25,000 for a median-priced home.
- This is a one-time but significant upfront cost many first-time buyers overlook.
2. Agent Fees
- Selling your old property usually involves real estate agent commissions of 2–3%, sometimes higher.
- Buying a new property may also involve agent negotiation fees or closing costs.
3. Legal & Conveyancing Fees
- Expect $1,500–$3,000 in legal costs for title searches, contracts, and settlement processes.
4. Time Investment
- Finding the right property can take weeks or even months, especially in suburbs with limited stock.
- Open homes, inspections, and multiple offers add to the time and stress.
5. Moving Costs
- Packing, moving trucks, storage, and minor repairs can add $2,000–$5,000 depending on the property size.
6. Potential Renovation Needs
- Even “move-in ready” homes often require upgrades such as painting, landscaping, or kitchen/bathroom improvements.
- These hidden costs can quickly add $10,000–$30,000.
7. Limited Supply
- Perth is experiencing a shortage of houses, meaning buyers often compete over the same properties.
- This scarcity drives prices up further and increases the likelihood of paying over market value.
Summary: Buying Costs
| Cost | Typical Range (Perth) |
|---|---|
| Stamp Duty | $15,000 – $25,000 |
| Real Estate Agent Fees | 2–3% of property price |
| Legal / Conveyancing | $1,500 – $3,000 |
| Moving Costs | $2,000 – $5,000 |
| Renovations / Upgrades | $10,000 – $30,000 |
| Time to Find Property | Weeks to Months |
Buying a home in a booming market is not just about the purchase price—it’s about the cumulative financial and time investment.
Option 2: Renovating Your Current Property
Renovation is often overlooked in a hot market, but it can be a smart, cost-effective strategy.
Why Renovation Can Win
1. Increase Property Value
- A strategic kitchen or bathroom upgrade can increase your home’s market value far beyond the renovation cost.
2. Avoid Market Premiums
- Avoid paying inflated prices for new properties in a competitive market.
3. Customise Your Home
- Renovate to fit your lifestyle without moving or compromising on location.
4. Faster Results
- Internal renovations can often be completed in days or weeks, compared to months spent searching for a new property.
Making the Decision: Buy or Renovate?
Key Considerations
- Budget: Factor in all hidden costs of buying, not just the asking price.
- Time: Buying a home can take months; renovations can be completed faster.
- Location: If your current suburb is ideal, renovations might yield better returns than buying elsewhere.
- Market Conditions: Limited housing stock increases costs and competition.
Smart Strategy: Hybrid Approach
- Buy and Renovate: Purchase a property with potential for cosmetic or internal upgrades. Build equity while tailoring it to your preferences, which we can assist with.
- Renovate Your Current Home: In suburbs with high demand, renovations may give you the highest return on investment without the stress and hidden costs of moving.
Conclusion
In a booming market, buying a new home can seem attractive, but it comes with hidden fees, time delays, and potential renovations, which can easily push your costs beyond initial expectations. Renovation, on the other hand, offers a faster, more controlled, and often more profitable alternative—especially if you love your current location.
Sometimes, renovating the home you already own is the smartest investment you can make.
Call to Action:
Thinking of renovating or exploring buying options in Perth? Contact Perth Property Improver today for expert advice and start making the most of your property in today’s booming market.
