Renovation nation

A record boom in home alterations and extensions carries the promise of new buying opportunities for those seeking high-quality larger dwellings.

Kiwi homeowners are doing up or extending their properties in record numbers, in a trend which experts believe will result in new buying opportunities for those seeking larger or higher-quality homes.

Building consent figures show that in the three months to June local authorities across New Zealand issued 6,522 consents, worth a total of $464 million, for alterations to existing dwellings – more than in any quarter since at least 1990, when Statistics New Zealand began publishing the figures.

In the year to June, some 23,621 consents worth a record $1.84 billion were issued for projects nationally – at an average of just under $78,000 per alteration.

These figures generally relate only to more major structural changes made to homes, such as adding rooms or moving load-bearing walls, which require building consents – but do not include basic repairs, maintenance or decoration.

Nationwide, work on major alterations made up roughly $1 in every $8 (13 percent) of all money spent on residential building work, underscoring the major role it continues to play in the building market.

Daniel Coulson, Bayleys national residential manager, says: “With market activity and house price growth having slowed in many areas, some owners who may otherwise have considered moving or trading up have decided their best option is to stay put and take matters into their own hands.

“These people are investing significant amounts to upgrade their homes to meet evolving needs or to make space for growing families – or simply in an effort to add value for a future sale.”

Coulson believes that while an alteration can be a great way to customise your home for your own future requirements, those with a sale in mind should consider their options carefully before investing large sums in a major upgrade or addition.

“Generally speaking, while minor improvements and good presentation can be counted on to boost a home’s resale value, it’s not always clear that a seller will get their money back on a major alteration.

“In the longer run, though, there could be particular benefits for buyers as a result of current activity. At a time when intensification is driving new housing supply towards smaller, more compact dwellings, the record numbers of alteration projects and home extensions now underway promise a pipeline of select buying opportunities for those seeking attractive larger or higher-end homes.”

REGIONAL BREAKDOWN

Nearly a quarter of consented alterations in the June quarter, 1,437 in total, were carried out in the Auckland region where the average value of nearly $134,000 per project was more than two-thirds above the average project spend nationally.

The second highest number of alterations were carried out in Wellington, where 846 building consents were issued in the June quarter, the highest quarterly number since 2004. At a combined value of $62 million, alteration projects account for 20 percent of all residential building work in the region – well above the percentage nationwide.

In Canterbury, 829 consents were granted for alterations worth a total of $44 million. The average project value of less than $53,000 is well below the national average, and the scale of alterations has eased up significantly since averaging up to $85,000 per project as recently as three years ago.

Meanwhile, Otago is in the grip of its own record-breaking home do-up craze. Both the 594 alterations consented in the June quarter, and the combined project value of $27 million, far surpassed anything seen since the Statistics NZ records began in 1990.

Source: https://www.bayleys.co.nz/news/residential/renovation-nation