Best spots to renovate

A bigger cut: Renovations and upgrades can add up to 39 per cent to a home’s value.

Although the reality TV program The Renovators on Channel Ten has bombed, the strategy of doing up and reselling an old house remains a profitable endeavour, so long as you pick the right suburb.

A recent study suggests there are dramatic differences in the returns on investment from house renovations, depending on the city or suburb.

Using median house prices for renovated and unrenovated properties listed on realestate.com.au , and the quotes offered on ServiceSeeking.com.au for renovation work in the corresponding areas, researchers attempted to identify which locations provided the best return on investment.

According to the National Renovation for Maximum Resale Value report, renovations in the east of Sydney or Brisbane provided a far higher return than work done in other areas of those cities. While in Melbourne and Adelaide, the northern suburbs provided a higher return on investment. The highest returns overall came from the southern suburbs of Perth, where an updated kitchen or bathroom and a coat of paint increased the value of a property by an average of 39 per cent.

Overall, it’s the mining boom cities of Brisbane and Perth that provide the highest pay-off for renovations. Upgrading a property in Brisbane will raise its sale value an average of 25 per cent. While in Perth, the changes will increase the value of the property by as much as 23.8 per cent.

The worst-performing areas were Perth and Brisbane’s northern suburbs, Adelaide and Sydney’s west and Melbourne’s east, where a renovated house sells for just 6.4 per cent more than its unrenovated equivalent.

BRW

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