The great divide

There was a time, not long ago, when DIY was in vogue. 

When The Block dominated the TV ratings and lay people considered themselves renovators and flippers.

The good old days when you could landscape your entire garden for $10,000 and do a second storey extension for $300,000.

When you could call a tradie for a quote and they’d actually call you back the same day.

Sadly, those days are over. 

Fancy some new windows and doors for your living room? $30,000. 

Fancy a pool? $150,000. 

Fancy an architectural renovation for a double fronted Victorian? $2,000,000. 

And that is if you are willing to go into battle with council (via email only), and your objecting neighbours, and your builder who might go broke before the frame is up.

Today is not the environment for the hobby renovator or wannabe flipper. 

If you’re embarking on a substantial renovation in 2023 you better have deep pockets, an iron will, the patience of Mother Theresa, and a bulletproof relationship with your partner. 

Buyers are finally catching on to the sheer challenge – financial, temporal, emotional – of renovating, and are willing to pay a premium to avoid this. 

Fully renovated homes are outperforming the market by a great margin. 

The better the renovation, the more competition and the higher the price.

The divide – or delta – between an unrenovated home and a renovated home has grown drastically since COVID.

This divergence seems to still be expanding. 

In 2016, the difference between an unrenovated single front in Prahran and a fully renovated one was minimal.

At the time, buyers were seemingly willing to pay as much or even more for the opportunity to add value. 

“Blank canvas”, “good bones” and “renovator’s delight” were selling points. 

Now it’s all about “turn key”. 

And higher building costs are here to stay. This is a step change, not a cycle.

While prices of materials may stabilize, construction costs realistically will never come down from this new normal.

Not with inflation, high immigration and a severe shortage of housing supply in the pipeline.

Those brave enough to complete their renovation visions are being rewarded with exceptional results. 

Those willing to buy a property that needs work are getting far better value than just a year or two ago. 

Unrenovated homes are still selling, just not quite for the premium we were seeing during the heydays of The Block.

And I believe we will continue to see this great divide between ‘turn key’ and ‘fixer upperer’ properties in the years to come.

Feature Property: 79 Paxton Street, Malvern East