You can spend roughly the same amount on the same improvement and get a completely different result depending on where your home is.
Quick answer: The same renovation can add very different value in different suburbs, because buyers pay a premium for different things. As a rough guide, a car space where Council allows one could add around $200,000 to $250,000 in the Inner West but closer to $100,000 in the Sutherland Shire.
A car space is a good example.
As a rough guide from what I’ve seen, if you’re in the Inner West and Council allows you to add one, it could add around $200,000 to $250,000 to the value of the home. In some areas, potentially even more.
Put the same car space on a home in the Sutherland Shire and you might be looking at closer to $100,000.
It probably costs about the same to build. But what you get back is very different.
That’s why, before deciding what to renovate, I wouldn’t just ask: “What adds the most value?”
I’d ask: “What are buyers in my area actually willing to pay more for?”
Because there are some improvements that tend to add value almost everywhere.
After that, the suburb starts to matter a lot.
Kitchens And Bathrooms Are Usually The Safest Place To Start
If you want the broad answer, I’d normally start with kitchens and bathrooms.
Both have come a long way over the last 20 years.
Look at bathrooms now. You’ve got underfloor heating on smart switches, heated towel rails, better showers, spas and all sorts of features that simply weren’t common when a lot of older homes were built.
So if you’ve got a home that’s 20, 30 or 40 years old, updating the bathroom isn’t only about making it look newer.
You can improve how the room actually works.
Kitchens are the same.
You’ve got better appliances, better benchtop options, more functional storage, and we’re also seeing more people add butler’s kitchens where they’ve got the room. That gives you the working kitchen behind the scenes while keeping the main kitchen clean when you’re entertaining.
Kitchens and bathrooms tend to make sense in most areas because everybody uses them. Once you move beyond those obvious improvements, though, the answer gets much more local.
The Improvement Your Suburb Rewards Might Surprise You
This is where you have to be careful about copying what somebody else has done.
An improvement can make a lot of sense in one part of Sydney and give you a very different return somewhere else.
Take the Inner West.
Homes there are generally smaller, so space carries a premium. A second or third bathroom can push a home into a different category, particularly where the block is large enough to accommodate it.
And then you’ve got parking.
Earlier, I mentioned that, as a rough guide, where Council allows you to create a car space, it can be worth $200,000 to $250,000. That’s because off-street parking is so difficult to come by in some of those areas.
Now move down to the Sutherland Shire, and the priorities can be different.
There, having more bathrooms can add real value. Going from a three-bedroom home with one bathroom to a three-bedroom home with two or three bathrooms gives everybody their own space, and that’s something buyers in that market can value.
A car space still adds value too.
It just may be closer to $100,000 rather than the sort of number we could be talking about in the Inner West.
Then you’ve got places like St George and the Eastern Suburbs, where car accommodation, additional bathrooms, second toilets and better indoor-outdoor living can all make a difference.
The point isn’t that one of those improvements is always better than another.
It’s that you need to understand what matters where your home is.
What It Costs Is Only Half The Decision
This is the bit people sometimes miss.
You can spend money on a perfectly good renovation and still put that money in the wrong place if part of your goal is improving the value of the property.
Let’s say you’ve got two improvements that cost roughly the same amount.
One solves something buyers in your area are actively looking for and adds significantly more value. The other makes the home better too, but the local market simply doesn’t put the same premium on it.
Neither one is necessarily a bad renovation.
But if you’re deciding where to put a limited budget, you’d probably want to know that before you spend the money.
So the construction cost only gives you half the answer.
You also need to understand what that improvement is likely to be worth once it’s finished.
How To Find Out What Your Suburb Actually Rewards
This is where you normally need a few different people involved:
- You need someone who understands the property market, whether that’s a real estate agent or a valuer, to give you a sense of what buyers in the area are paying for.
- Then you need a designer to work out whether the improvement can actually fit your existing home, your block and any Council restrictions.
- And you need somebody who understands the cost, such as your builder or a quantity surveyor, because there’s no point adding $150,000 in value if you’ve had to spend $200,000 to get there.
Those three answers need to line up:
- What will the market pay more for?
- Can we actually build it here?
- And what will it cost to do properly?
That’s one of the reasons people come to us at Enhance.
We can bring those different sides of the decision together before you’ve committed to plans and started spending money.
Because there’s no point designing something first and only finding out later that the numbers never really made sense.
Bottom Line: Know What Your Market Values Before You Design Around It
There’s no single renovation that gives every homeowner the same return.
Kitchens and bathrooms are usually sensible places to look. After that, your location starts doing a lot more of the talking. The suburb matters. The block matters. What Council will let you do matters. And what buyers around you are prepared to pay more for matters.
Which leads to an even bigger decision:
Should you renovate, extend or rebuild in the first place?
That’s why we’ve put together our free guide: Renovate, Extend or Rebuild?
It helps you work through that decision before you start committing money to plans, including:
- Why the path you choose matters more than the plans you draw
- How to think about your suburb and surrounding market before deciding where to spend
- The questions worth asking before you commit to a builder or a set of plans
Because improving your home is one thing. Knowing you’re putting the money into the parts your home and your local market will actually reward is another.
Renovation Value By Suburb: Frequently Asked Questions
Why can the same renovation add more value in one suburb than another?
Because buyers in different areas pay a premium for different things. As a rough guide, a car space where Council allows one could add around $200,000 to $250,000 in the Inner West, where off-street parking is hard to find, but closer to $100,000 in the Sutherland Shire. It costs about the same to build either way. What buyers will pay for it is what changes.
Which renovations add value almost everywhere in Sydney?
Kitchens and bathrooms are usually the safest place to start, because everybody uses them and both have come a long way over the last 20 years. In an older home you can improve how the room works, not only how it looks. Beyond those obvious improvements the answer gets much more local, which is when it helps to know when a renovation stops making financial sense.
How do I find out what my suburb rewards before I spend?
You normally need three answers that line up. A real estate agent or valuer can tell you what buyers in the area pay more for, a designer can confirm it fits your home, block and Council restrictions, and your builder or a quantity surveyor can price it. There’s no point adding $150,000 in value if it costs $200,000, which is the trap of overcapitalising.
Does what Council allows change which improvement is worth doing?
Yes. A car space only adds that value where Council allows one to be created, so whether you can actually build it on your block matters as much as what buyers will pay. Settling that before plans are drawn avoids designing something first and finding the numbers never made sense, the pattern behind renovation plans that come back over budget.
To check what approvals your block and your Council are likely to involve, the NSW Government’s planning website is a useful independent starting point.
Not sure what your suburb rewards? Talk it through with Erwin at Enhance Building. Contact Enhance Building or call 0468 057 127.
