Is Renovating the Biggest Trend in Adelaide in 2024?

Buying an older home to renovate? Why renovating might be your best bet in Adelaide's 2024 housing market.

With the current real estate market dynamics, many prospective homebuyers are asking, "should I buy to renovate?"

It's a valid question, especially in Adelaide where the housing market is increasingly embracing renovations.

And Natalie Jones, Sales Director at We Connect Property, has been watching this trend play out firsthand.

“2024 is definitely seeing a shift towards buying and updating older homes, and it’s being driven by several key factors.

“Savvy investors often view renovating as a strategic move that can lead to better financial outcomes compared to buying new, while first homebuyers appreciate the relative affordability of these properties compared to new builds or pre-renovated homes.”

So whether you're looking to buy a property you can make uniquely yours, or you’re seeking a potentially wise investment, renovating a fixer-upper offers distinctive advantages.

It pays to consider the unique value that updating a run-down property could offer.

Understanding the Renovation Boom

The resurgence in home renovations has been fuelled by several factors.

Firstly, building costs have stabilised after a period of high volatility, making budgeting for renovations more predictable.

The availability of tradespeople, although still tight, has improved compared to the previous year or two. This gradual shift has been largely due to market corrections and strategic interventions aimed at balancing supply and demand in the trades sector.

Renovating a home allows buyers to personalise their space to suit their preferences. This can be especially rewarding, but is often not possible with a new build.

Furthermore, despite the upfront costs and effort involved, renovating can significantly increase a property's value, often making it a wise investment compared to purchasing a new or fully renovated home that likely comes with a premium price tag.

The Financials of Renovating

Is renovating worth it from a financial perspective?

Absolutely, if done wisely.

Current market conditions in Adelaide suggest that while prices for homes remain high, the cost of renovating hasn't risen at quite the same pace.

This discrepancy creates a unique opportunity for buyers to purchase lower-priced, older homes and invest in renovations, potentially yielding higher returns upon resale.

Natalie from We Connect Property supports this view.

"By purchasing a run-down property at a lower price, renovating it strategically and then either selling it at a premium or renting it out, investors can maximise their ROI significantly."

Moreover, renovation can be less daunting financially, especially for first homebuyers.

Instead of a lump-sum payment required when purchasing a new property, renovating allows for the gradual investment of funds, spreading out expenses over time as improvements are made.

So renovating an older home could indeed prove less expensive - and less intimidating - than buying new.

Market Trends and Consumer Behaviour

Current trends indicate a strong preference among Adelaide homebuyers for properties that offer potential through renovation.

This is partly due to the perception of value - buying a cheaper, older home and upgrading it can often lead to greater equity and resale value.

Particularly in Adelaide, where home values continue to rise, an increasing number of homebuyers are choosing properties that need a bit of TLC over those that are move-in ready.

Demand for these older homes has spiked, as the competitive nature of the current real estate market shows that updated homes often attract excellent prices post-reno.

Natalie also adds, “choosing to renovate an older home can also offer cost-effective entry into a more desirable suburb as well. It allows homebuyers to purchase at a lower price point in their preferred area, and slowly add significant value over time as their budget allows."

So Should You Buy an Older Home to Renovate?

For those considering entering the Adelaide housing market or hoping to upgrade, buying an older home to renovate is becoming an increasingly attractive option.

And the reasons are threefold.

Firstly, it allows for personalisation. Choosing to renovate an older home allows buyers to engage directly with the design and functionality of their home, tailoring it to their personal tastes, which is seldom possible with pre-built options.

Secondly, it offers excellent investment opportunity and potentially higher future gains through capital growth.

And finally, it provides an accessible entry point into the housing market that might be less daunting financially than opting for a new or already renovated home.

So all current market conditions considered, buying an older home to renovate could indeed be a smart choice.

We think 2024 stands as a promising year for property renovators in Adelaide.

With stabilised trade availability and renovation costs, and a market that rewards updated homes with higher price tags, more and more homebuyers are turning towards renovation as a viable property investment strategy.

With some savvy market research and smart budgeting, finding and renovating an older home can be a financially sound decision that can yield significant returns in what is a robust real estate market in Adelaide.

“Renovating property isn't just this year’s biggest property trend, it's a proven strategy that has seen many of our clients achieve great success,” says Natalie.

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As property experts with over 21+ years combined experience in buying, selling and managing property in Adelaide, We Connect Property are ready and waiting to offer expert guidance and support when you need it most, and answer all your questions about buying your next property.

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DISCLAIMER: All recommendations made by We Connect Property are general in nature and not to be relied upon as legal or financial advice. To ensure accuracy, we always strongly recommend seeking independent, professional advice tailored to your specific situation before making any investment or financial decisions.