The property choices in a competitive market

Home ownership stats: In Australia today, fewer than half of 25-34 year-olds own their home. Picture: Shutterstock

Home ownership stats: In Australia today, fewer than half of 25-34 year-olds own their home. Picture: Shutterstock

If you are not happy with your home or investment property, is it better to sell, renovate or buy at the moment? Real Estate Institute of Australia's (REIA) president Adrian Kelly said it depended on individual circumstances.

"Generally speaking, undertaking a large renovation would be considered when planning to retain the property," Mr Kelly said. "Selling is a very good option at the moment given the strong markets and high demand being experienced across the country at present.

"Buying is always a good option versus renting, but as always, potential purchasers should do their research properly."

Selling

Although you may obtain an excellent price for your home, you generally have to buy again with properties being snapped up and steep prices. If you have a good reason to sell or want to downsize or upgrade, then it's for you.

Renovations

You see many TV programs about flipping houses. It looks fun (and amazing once done), plus an easy way to make some money. What is the best way to fund home renovations? "From cash savings is always best," Mr Kelly said.

"Many people also use a mortgage redraw facility or even borrowing some extra funds can be an option provided that the ability to repay those funds remains."

Is it worth doing a renovation? It depends on how much time you have, what it entails, and whether you have the spare cash to renovate. If you do decide to do an update, here are some tips:

If the house was dodgy to begin with, it will probably still be dodgy once you're done with it.

Home renovator
  • Stick to the budget - easier said than done, as a renovation usually takes longer and can cost more than envisaged.
  • Start small if you don't have the capital - painting and a tidy up do wonders.
  • Allow for extra expenses - you may have to pay to remove asbestos or update the electricity.
  • Use professionals, unless you are a licensed builder, hire a licensed, reputable and insured builder and do your research. If it all sounds too cheap, there's usually a catch.

Buying

Saving for a deposit is the biggest hurdle to homeownership. In the early 1990s, it took six years to save a 20 per cent deposit on an average home. Today it takes 10 years. "These days, first home buyers have worked out how to live larger in small spaces," a real estate agent said. "They generally have no need for a yard, pool and spa, though they do look for an area where they can entertain and perhaps work from home."

Government

The government is encouraging homeownership through lower deposits, stamp duty exemptions, grants and bonuses.

Take the time to research what is being offered.

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