New Farmers are deciding to renovate & stay, rather than upgrade to flash new apartments.
With more and more cranes appearing in the sky it might seem only natural for residents of New Farm to want to take to the sky in the towers surrounding James Street and the Valley; however, locally based architect and Director of Studio 15b, Allison Smith, is finding more and more New Farm residents are opting to stay and renovate.
“The beauty of New Farm is that character homes are scattered throughout, and I think this presents a unique opportunity to create a custom designed home rather than another cookie-cutter property,” Smith suggests one of the quickest and most impactful types of renovations she helps clients with is raising the house. “If your existing home is of predominantly timber construction, you can raise and build in underneath. This simply doubles the size of your home and gives the opportunity to add modern conveniences such as a double garage, a new entry, additional bathrooms, bedrooms and living spaces.”
Importantly, Smith highlights that the use of an architect can help you cleverly repurpose spaces to house different functions from the original house design, such as living spaces which are better orientated to views or the ideal Northern Sun.
Smith believes it is imperative for all would-be renovators to spend their money wisely. “Concentrate on creating “wow” factor in a few select areas, such as your entry, kitchen, ensuite or staircase, and keep the rest simple and inexpensive. This ensures you make the most of your budget.” There is sometimes the opportunity to remove an existing flat ceiling to create a raked ceiling with exposed roof structure. This can be used to create more light, volume and interest in a specific area such as the living room or bedroom to create that wow factor, but can also add the most value to the property.
This also makes sense financially. CoreLogic reported the median house price in New Farm to be over $1.30M with a 15.40% capital growth increase in 2015 alone, compared to Brisbane City Council’s growth of 5.60% and a 2.50% reduction in Capital Growth in Median Unit Prices. It is more common for residents to want to stay in their existing home and use the equity from their increased property value. Red & Co’s Brunswick Street based finance broker Jayden Vecchio has found a similar story with locals, who have been able to get up to 100% home loans for their renovations.
Vecchio believes this has been caused largely by the growth experienced by New Farm houses in the past 3 years. “In many cases, we have helped locals use the equity in their existing loans, topping up or refinancing by using existing equity in their property. Most banks will lend up to 80% of the property’s value ‘cash out’ without needing to provide receipts or quotes on the work to be completed. They will also lend over 80% of the property’s value all the way up to 100% of the funds required, but you would need to provide receipts or quotes for the scope of work to be completed.”
While it has been widely reported banks have wound back investment and apartment lending, this has not been the case with renovation lending, a point which Vecchio believes presents a good opportunity for homeowners. “In the past, the banks saw the risks of renovating properties. We had seen cases where people weren’t using licensed builders, who were going bankrupt half way through the construction. Now, however, the banks require all borrowers to use a licensed and fully insured builder to mitigate this risk. Additionally, they must be a member of the local Master Builders Association. Since this has been implemented, the banks have eased up on the requirements for renovation loans.”
When asked if there are other financing options outside of home loans, Vecchio suggests that either low or no interest credit cards are a viable option for smaller renovations and, in some cases, as a gap fill. They can be very useful, provided you don’t get caught in the trap of taking more than 55 days to pay off the balance. After 55 days, credit cards generally jump to significantly higher interest. Alternatively, you can even take out a small personal loan to help get the works done quickly and easily.
Allison’s Top 5 Renovation Tips:
- Construct a statement entry with WOW factor.
- Install window boxes into existing external walls to help make a room feel bigger without the need to build a full room extension.
- Raked ceilings can be used to create more light, volume and interest in a specific area such as the living room or bedroom.
- Concentrate on creating a WOW factor in a few select areas, such as your entry, kitchen, ensuite or staircase, and keep the rest simple and inexpensive.
- Use an architect, they can help you to re-purpose spaces to house different functions that are better orientated to views or Northern Sun and improve the property’s value.
Jayden’s Top 5 Financing Tips:
- It is possible to borrow up to 95%, or even 100% of renovation costs.
- Banks will only fund up to 80% of the property’s value without receipts, for more they will need a construction contract or invoices.
- Not all lenders do renovation or construction loans, so don’t risk being declined by your bank.
- In most cases, you may qualify for larger interest rate discounts with increased lending.
- There are other options for financing your renovations outside of home loans, including credit cards and personal loans.
Check out more information on Red & Co’s renovation month or contact Jayden if you need help with financing on 0421 874 357. Allison Smith is the Director of Studio 15b if you want to get a free consultation on your renovation contact her on 0438 134 875 or view her portfolio.