When you really examine all the pro’s and con’s of this age old question, you have to really do the sums correctly.
At present in all the major cities and towns of Australia, traffic congestion is the number one concern for Councils and State Governments as it is affecting the quality of life of the residents of these cities and is a major contributor to the drop in productivity of these comunities and our nation over the last decade or so.
As the pressure to spread to the outer suburbs of the major cities of Australia, you can distinguish as the main driver of this is the market for new housing, and as that’s where you can find land to build a new home this is feeding the congestion as these residents have to make there way back into the city to work.
The alternative to this option is to buy an older home closer to the city centre and not have to battle the traffic you inevitably encounter every morning on all the major freeway’s feeding the major cities of Australia.
The problem is that you have to live in a older style home and they are usually in need of renovating to make them reasonably liveable, this of course is a nightmare as anyone who has done it will tell you.
The problem with renovating is that the builders and tradespeople who are willing to do this sort of work charge a lot more than they would to work on new homes so the cost are very large and as there is a great deal of uncertainly as builders are usually unwilling to give a fixed price contract for renovating work as there is no real way of knowing what you might need to fix once you start demolising the old structure so you can build the new work.
This of course means that renovating today is basically do it yourself or pay through the nose to have it done.
Now doing it yourself realy means taking the responsibillity for the whole process and you will still need to pay for all the tradespeople (i.e plumbers,electricians,carpenter etc.) that are required to meet the building standards and codes and get final approval from the council or certifier.
You also have to take into account that you will usually have to move out of your home and rent while the renovation is underway and it is not unusual to have to rent for 12 months while the house is first prepared for the new work to be done and then rebuilt and completed.
So if you take into account the rent for 12months at say $450.00 per week = $23,400.00
Also the cost of moving and or storage could be easily $3,000.00 each move + $6,000.00.
And after going through all that pain and expense the home is only half new and usually not as energy efficient or as comfortable as a new home would be.
The other option and one that is really starting to take off which is to demolish or remove and sell your old home and build brand new, you still have to rent for around 8 months but when you move back to your new home it will all seem worthwhile.
It means you can stay in the area you love but live in a new larger, better designed modern energy efficient home, and when you do the sums it is usually more attractive because the value of a new home in a establised residential area is always going to be more valuable than a renovated older home.
It’s human nature to want new and by building a new home you get a house that is designed to suit you or your families individual lifestyle.
After more than 6 years as a principal of Real Estate office in the eastern suburbs of Brisbane and 12 years in the building industry I have found that when you really do the sums on the cost as compared to the end product worth, demolishing or removing your existing home and building new is by far the most rewarding and cost effective option and as a added bonus a much better investment.
Food for thought!