Daily Archives: January 27, 2021

The six buyer segments in the property market

Our demographic shape is changing; there are six distinct buyer segments in our Australian property market:

  1. young renters;
  2. first home buyers;
  3. upgraders;
  4. downsizers;
  5. retirees; and
  6. the aged care market.

Looking ahead, the demand from young renters and upgraders is set to decline; while that from aged care will likely remain steady.

The stand out groups (those set to be the main drivers of Australia’s housing demand over the next ten years) are first home buyers; those downsizing and retirees.

It may surprise some, but first home owners are generally aged 35 to 44 years.

This group is projected to take up 20 per cent of our total new housing demand over the next decade.

What first home buyers are looking for in a property is the room to grow and the opportunity for property improvement. And naturally, affordability is a big consideration.

Preferred housing options for first home buyers vary, depending upon the location.

Some first home buyers opt for inner city apartments; some look to townhouses/duplexes and small houses in middle suburbs; and some prefer larger detached and dual-income homes in outer suburbs.

The downsizer demographic refers to those aged 60 to 74 years.

Almost all of this group (92 per cent) have no children living at home; while just on three-quarters are couples or live alone.

Downsizers are projected to take up 32 per cent of total new housing demand over the next decade.

Their preference is to remain in the same neighbourhood, close to friends, family and established ties.

What they are looking for is low maintenance; convenience; like-minded residents; and small projects.

Some from this group are looking to experience inner city living – their preference is for spacious, well-priced, quality apartments.

This group also prefers compact housing like townhouses; villas and dual-income homes in both middle ring and outer ring suburbs.

Understanding Australia’s real underlying housing need is more than just a matter of calculating population growth and average number of people per household.

Demographics will determine our future:

It’s our demographic profile – the change in our household formation – that will best determine future housing need.

But the right housing will need to be built; and importantly, at the right prices, in order to encourage key buyer groups to purchase.

At issue is lack of diversity in Australia’s housing stock, and the ability for most to afford their housing preference.

Property Valuations 5 things you should know

Valuations are an essential aspect of the property investment game and because their result can be so crucial, here’s five elements to understand about the process.

1. It’s not an exact science

Valuers are only human; therefore the determinations they make as to fair market value of a property will be somewhat subjective in nature.

There’s also the prospect of the valuer being legally liable if they place too high a price on the property, and the bank subsequently loses money on the loan.

Many in the property industry believe this threat to the valuer causes them to be conservative with their estimates.

2. It’s not a real estate appraisal

Real estate agents can be notoriously bullish when it comes to appraising property, because they want to secure the listing to sell your property and they know they’re competing against other agents for your business.

They’re also well aware that home owners and property investors alike, want to achieve a good price for their dwelling.

So although most agents are very professional, they can alter their estimates upwards to meet your expectations.

This is in contrast to independent valuations, performed by valuers without any vested interests.

They are tasked with one duty only – valuing the property in question.

And importantly, the end value they attribute to the property makes no difference as to how much they get paid.

3. Not all valuations are created equal

We often talk about valuations like there’s only one generic process undertaken by every valuer; however this is not the case.

But as a property investor, you need to be aware that how the valuation is carried out can have a direct influence on the end outcome.

Full valuations are, as the name implies, the most comprehensive and involve a complete internal and external inspection of the premises, as well as researching comparable sales and the overall local property market.

Restricted valuations; often referred to as “kerbside” or “drive by” valuations, involve market research as well as an external inspection of the property.

You can see why it might be problematic for the valuer to never set foot inside your property before making their assessment.

4. Comparable sales are relied on heavily

One of the main forms of data a valuer consults to determine their estimate for your property is comparable sales in the area.

That is, recent sales of dwellings close to your property and similar in type and size.

Comparable sales can sometimes be difficult to obtain in remote areas or for buildings with unique features and styling, so this can make it trickier for valuers to come up with figures.

In other words, the less comparable stock there is to use as a yardstick, the more likely valuers will be to rely on their own subjective interpretation of what your property is worth.

5. You can be a part of the process

Most property investors are not aware that they can actually assist the valuer in their assessment of your premises.

You can also be present throughout the valuation to answer any questions they might have, with all information about the property close at hand.

While you don’t want to appear to be tampering with, or trying to influence the independent process, it doesn’t hurt to give valuers any information that might be pertinent to their judgment, such as improvements undertaken since purchase.

Getting the best valuation outcome:

While we may not always get the result we want from an independent valuation, property investors can be pro-active when it comes to achieving the best potential outcome by:

  • Providing your own list of well researched comparable sales – a valuer may or may not use this information.

  • Obtain your own valuation and request a review if you’re not happy with the figure provided by the bank appointed valuer.

  • Ask to see the valuation report so you know how they’ve worked out the price for your property and can read any additional comments made.

  • Do your own research and have a thorough understanding of the local property market.

Remember, nothing gives you more power in the property investment game than well-rounded knowledge.

For more property related advice, check out our blog

How to become a real estate agent guide

Why pursue a career in real estate?

Real estate professionals come from many different walks of life. Many people today choose to take courses to allow them to pursue a career in real estate. Some choose this fulfilling career at a young age, while others discover it as a second career.

Not only is real estate rewarding, it can enable you to make a decent living. Real estate agents generally help people buy or sell a home.

Leading market analysts at IBISWorld report that Australian real estate industry expectations are high. They suggest there will be an increase in high-density housing and the population growth will expand the existing real estate industry.

They also predict that real estate industry revenue will increase by 1.6 percent each year, reaching $9.8 billion between 2016 and 2017.

Are you interested in joining the growing industry? Here are some of the main reasons for becoming a real estate agent:

Work for and with people

As a real estate agent, the major part of your job is interacting with a variety of clients on a daily basis. You can help people make their home ownership dreams come true or help them move onto the next stage of their lives, be it a bigger house to accommodate children, their first investment property, or downsizing once the kids leave the nest.

As a real estate agent, you also have the opportunity to work with a team of like-minded real estate agents and other associated professionals such as settlement agents, mortgage brokers, etc.

Degree of flexibility

If you like having more flexibility than the common office job, you will enjoy being a real estate agent. You get to control your own business hours, and are not always stuck in an office.

Most of your time will be spent “on the road” showing properties and meeting with clients. You can specialise in the sale of residential, business or commercial sales, depending on your skills and interests.

Enjoy limitless income possibilities

For many workers, raises are rare; however, as a real estate agent your income potential has no limits.

All you need is a strong work ethic and the proper sales, marketing and customer service training. It takes some patience and effort in the beginning, but once you are an established agent, sales leads will come.

What it takes to be a successful real estate professional

There is a high degree of competition in today’s property market and as a real estate professional, you will need to be dedicated to serving your clients. Although real estate agents have the opportunity to set their own working schedules, they still have to be available when their clients need to contact them. A successful career in real estate generally means working 24/7.

Real estate professionals should possess certain qualities

Training is crucial for success in this field; however, some personal attributes for real estate success include:

  • A great working knowledge of the local sales area
  • Effective communication and mediation skills
  • A pleasant and caring demeanour
  • The ability to network effectively
  • Being able to work independently without supervision
  • Great attention to detail and strong organisational skills

Real estate salespeople perform a diverse variety of tasks. It is hard to get bored in the field of real estate sales, because you get to perform many interesting duties, including:

  • Generating leads with various marketing campaigns, emails, phone conversations, and Internet and local advertising
  • Discussing how to present the property with sellers, as well as:
    • The method of sale
    • The various costs
  • Staying updated on the local areas and estimating current market prices and property trends
  • Listing and advertising the details of land or home for sale
  • Holding home opens for buyers
  • Assessing the needs of buyers
  • Locating properties for buyer consideration
  • Taking prospective buyers to inspect properties
  • Presenting the merits of each property and the terms of sale
  • Negotiating the terms of the contract between a buyer and a seller

Real estate training: where to go and what to expect

The exact requirements to obtain a real estate registration vary from state to state, so it is best to check the Australian Government’s Department of Education and Training Job Guide. In fact, the exact titles and job responsibilities can differ greatly by state, as well.

It is important to understand exactly which licence you plan to apply for before beginning your training; however, all states require that you complete a basic real estate training course.

The first step towards starting your career in real estate is checking the real estate licensing and registration specifications for your state beyond the short courses or traineeships. In order to work as a real estate agent, you will need to complete the following general regulations:

  • Be at least 18 years of age
  • Be a person of good character and repute and a fit and proper person to hold a certificate of registration;
  • Understand duties and obligations outlined in the Real Estate and business Agents Act on persons  involved in negotiating real estate transactions and business transactions.

Prerequisites and subjects vary from institution to institution, so contact your institution of choice for more detailed information on requirements, courses and licensing. Registration dates will also differ with each institution, so be sure you don’t miss any course enrolment deadlines. You may be able to study locally or through distance education.

Cover letter and resume advice for real estate professionals

Real Estate agents need to know how to sell, and that starts with selling their own qualifications, skills and talents to job recruiters and potential employers. Think of yourself as a valuable product when creating your cover letter and resume. Focus on your special strengths and use techniques to sell them to the real estate agency to which you are applying.

Click Here to Download Your Cover Letter & Resume Template

Creating effective real estate sales cover letters and communications

When seeking a position with a real estate agency, the cover letter is of optimal importance. It is a great opportunity to showcase your strengths and stand out from the crowd.

The guidelines for cover letters are a bit less strict than with resumes; however, whether you use bullet points or concise paragraphs to outline your skills and experience, be certain to use numerically quantifiable data to grab the attention of potential employers.

Create a clear and concise cover letter

A cover letter is a one-page document to send along with your resume when applying for a job. The four main purposes of a cover letter are to:

  1. Introduce yourself to the employer or hiring manager
  2. Explain the reasons you are a good fit for the job
  3. Fill any gaps your resume may leave – tell your story
  4. Detail important aspects of your resume

Creating a powerful cover letter

Here are some effective ways to make your cover letter the one that gets read and responded to promptly:

Learn about the recipient of your cover letter.

Do your research or call the company to find out the name of the hiring manager or person within the business whom accepts cover letters and applications. Learning this information will allow you to address the correct person in your letter.

You can go to their website, Facebook page, or even check on LinkedIn to find this contact information.

Explain why you are communicating with them.

After the initial address and introduction, make a bold start and jump right in. State the position you are interested in to get your reader’s attention immediately. Personnel managers and employers are busy people and will not waste time sifting through your article to understand your intentions.

Encourage them to request an interview with you by being clear and direct from the start.

Example of a good beginning:

“My name is John Doe and I would like to formally apply for the position of salesperson for your real estate agency. Please review my qualifications, below, which I feel make me the perfect candidate for XYZ Real Estate.”

Target your cover letter.

Include these three basic paragraphs in your cover letter:

Paragraph One

This first paragraph should include a short introduction that includes:

  • Who you are
  • Where you saw the job posting
  • Why you are interested in the job
  • What your skills are related to the job
Paragraph Two

This second paragraph should serve to show you took the time to read the job posting and learn about the agency before applying:

  • Research the company to learn about them, so you can explain why you are a good fit for them.
  • Highlight specific words and phrases used in the job description
  • Describe your previous job experiences, training, skills and talents that will enable you to meet the agency’s needs, according to the job posting
Paragraph Three

This is the final paragraph where you include a call to action.

  • Let the reader know you are available for an interview and provide your contact information
  • Inform the recipient that you will be in touch with them after a week if you haven’t heard from them.
  • Lastly, thank them for taking the time to read your cover letter.

Set yourself apart from everyone else.

In order to catch the attention of the company  you are applying to, avoid the following common mistakes:

Being vague and generic –

Too many people write vague cover letters, like this:

“To whom it concern, I would like to work at your company. I am a people person and strong candidate.”

This start to a cover letter sounds like every other one that hiring managers receive. Hiring managers most likely will not make it to the end of this generic letter, but will instead put it to the bottom of the pile.

Use facts and statistics, and be direct and concise. Hiring managers are paid to be efficient. They have to screen dozens, hundreds, perhaps thousands of applicants to find the best individual for the job.

Neglecting to review your writing –

A cover letter with mistakes will not get a response. Ever. Mistakes show that the applicant did not take the time to check their work and careless. Keep in mind that spellcheck does not catch errors like their, there, and they’re.

This is a negative first impression, so have someone check your cover letter for you. Most people will not notice their own mistakes, so having a second set of eyes to check your work is priceless.

Ignoring the use of an applicant tracking system (ATS) –

Applicant tracking systems can read resumes, and then use keywords and key-phrases to determine whether to send you to the next stage. Some ATS software can search through cover letters for specific job posting keywords and phrases, so after you proofread your cover letter, check to make sure you have included keywords from the job posting, or any other keywords related to the real estate field.

Large real estate companies that receive a large volume of applications use applicant-tracking systems, so if you are seeking a job at a smaller agency, you may not need to worry about these systems.

Regardless if the company is using an ATS, you should still use any important words from the job posting at least once per document to show that you are detail-oriented.

Here are some resources for creating cover letters and other job search related communications:

Real estate resume resources and guidelines

Obtaining employment within the real estate field starts with a strong resume. Here are six steps to make yours stronger.

Start with a powerful professional profile.

Instead of listing your career objectives, dive right into your professional profile. Most real estate agents understand the reasons why you are applying for work.

What they need to know is why they should want to add you to their real estate team. By providing a professional profile, rather than a career objective, you can quickly demonstrate to your potential employer why they need to continue reading your resume by doing the following:

1. Be specific

In the first line of your professional profile, provide the most important information, such as your qualifications, licensing and experience.

Example: Licensed Real Estate Agent with 3+ years of residential sales experience.

This shows the employer that you have experience, and are committed to keeping jobs. By telling them what kind of real estate sales you are experienced in helps to determine if you are a good fit for their team.

2. Seek out a good fit when sending out resumes

Avoid wasting time and only send your resume to agencies who are a good fit for your interests and experience. You do not want to apply for a commercial real estate job if your main experience lies within the residential property market.

3. Leverage the power of numbers

Include some specific details on your personal skills and talents, such as achievements, awards and related skills and talents.

Instead of adding fluff to your resume use raw, factual data to back you up. Add some numerical statistics to support your information. This adds strength to your resume and removes doubt from your potential employer’s’ mind. Here are some helpful examples to follow:

  • Sold an average of 30 home sales per year.
  • Conducted monthly training sessions for new sales agents, decreasing onboarding time by 10 days.
  • Expert in creating and implementing customer marketing campaigns, increasing the agency’s acquisition rate by an average of 32% year-to-year.
  • Advise sellers on how to make homes more appealing to potential buyers increasing average selling prices by 16% from initial appraisals.

4. Prove you are a people person

Many real estate professionals mention that they are “a people person” or that they are “people-oriented,” which is fine, but in order to stand out above all the other applicants, you need to mention activities that prove it.

List any organizations, societies or clubs you participate in or have participated in that demonstrate your skills working with people.

5. Understand the relevant skills to mention on your resume

Aside from the usual words like trustworthy, flexible, resourceful and ability to network proficiently, you should include any details you have on all of the related skills you are proficient in, including:

  • Computers and Technology
  • Marketing and Research
  • Negotiation and Interpersonal Communication
  • Business Training
  • Math and Market Analysis
  • Customer Service
  • Federal and Local Real Estate Laws

6. Here are two helpful templates for your real estate resume and accompanying cover letter.

Simply download them to your computer and then add your details.

Click Here to Download Your Cover Letter & Resume Template

The real estate industry in Australia

The real estate sector brings in 2.9 per cent of GDP, which is higher than support services and business administration, support services, hospitality and agriculture. Here is an overview of the current real estate industry in Australia, according to careerfaqs.com.au:


The demand for skilful real estate sales professionals continues to increase in Australia.

According to Brendan Leahy, CEO at Naked Edge Real Estate, in Perth alone, the increase in properties listed in September 2015 increased to over 4,000 from the same time last year.


According to the Department of Employment’s Australian Jobs 2015 report, approximately 2% per cent of Australians are employed in the industry, which is the same as in financial and insurance services, as well as arts and recreation services..

In the five years leading up to November 2014, employment increased by 23.1 per cent. Employment for real estate agents is expected to increase within the next 5 years at a higher than average rate.

Real estate agent employment is expected to increase at an above average rate until November 2019, by 27,800 jobs, or 12.6 percent. The vast majority of those jobs are expected to be in the areas of real estate services and property managers.

Median Income

The median income for real estate agents varies greatly. A small proportion of real estate agents earn large salaries, while many who sell fewer properties earn more modest wages.  It is important to consider that the earning potential for successful real estate agents is far higher when you factor in commissions.

Commission rates are dependent on the market you work in and vary from agency to agency as well.

Strategies for a highly-successful real estate career

For those new to the real estate industry, it helps to find a mentor in the form of an established agent, sales broker or consultant. Ask if you can shadow them for a time, and offer your help in any way you can. You can offer to research the market, make sales lead phone calls or complete many other real estate tasks. Naked Edge Real Estate provides ongoing agent support and training from leading agents around Australian.

Align yourself with an agency with a good reputation that provides ongoing training mentoring and market-leading marketing initiatives for its agents. This provides extra tools and motivation when you are first starting out.

John McGrath, author of The Ultimate Guide to Real Estate; You, Inc.; and You Don’t Have to Be Born Brilliant is one of Australia’s most successful real estate agents. His agency business has grown over the past 25 years to control 20 per cent of Australia’s property market. He recommends the following key tips for optimal real estate success:

1. Determine your goals & make a vision

Planning is an important part of starting your career as a real estate agent. By identifying your strengths, you can determine the key areas in which you will provide your customers with value. McGrath identifies the following things needed to succeed in your career:

  • Operate with integrity
  • Have a systematic approach
  • Be disciplined
  • Execute in an orderly manner

2. Stick to your vision

Finding the right agency to start your career can be the key to your success or failure in real estate. Select a company with similar values,  that is willing to help you grow your skills in real estate. McGrath says handpicking a team that shared his vision is one of the reasons his agency has had 25 years of widespread success.

3. Adapt for continued growth

Adapting to environmental and global advances is crucial for getting ahead in the property industry. Technology is a powerful tool that can help agents market themselves and their services, as well as the properties they are selling.

In addition to technological changes, real estate agents will need to adapt to working with a variety of new clients, programs, and tasks.

Ask your more-experienced colleagues for constructive criticism, too. By working hard and being honest with yourself, you will get the sales you deserve.

Helping people find the home or property of their dreams is a privilege that no other field can offer. There has never been a better time to be a real estate agent in Australia. If you are interested in joining the real estate industry speak to the team at Naked Edge Real Estate about how to enter the vibrant, people-centric field of real estate and they can point you in the right direction.

Naked Edge Real Estate are always looking for our next shining star. If you are looking for a career in real estate, contact our office on 08 6254 6333, click here, or email myfuture@nakedrealestate.com.au today!

Housing prices over the last 25 years what’s happened

Over the past 25 years, the median house value nationally has risen by 412%, or $459,900.

Twenty five years ago, the median house value across Australia was just $111,524 and units showed a slightly higher median value, at $123,840.

Since 1993, median house and unit values have increased by 412% and 316% respectively, providing home-owners with a significant wealth boost.

The capital gain over the past 25 years equates to an annual growth rate of 6.8% for houses and 5.9% for units and in dollar value terms.

The median value of the typical Australian house has risen by $459,900 since 1993 and unit values are $392,000 higher.

But, as always…long term annual capital gains have been reasonably diverse across the capital cities, with growth in house values ranging from 5.9% per annum in Adelaide and Brisbane to 8.1% in the Melbourne property market.

Across the capital city unit markets, annual growth rates have ranged from 4.1% in Darwin to 6.6% in Melbourne.

In dollar terms, the Sydney property market stands out, with the average annual increase in house and unit values equating to $34,426 and $23,594 per annum respectively over the past twenty five years.

The diversity in growth rates over a long period of time highlights the cyclical nature of the housing market, with dwelling values rising at different speeds from region to region and period to period.

For example, despite the Brisbane housing market recorded one of the lowest rates of annual capital gains, the period between 2001 and 2004 saw Brisbane house values rising at more than 10% per annum; the lower rate of long term growth is largely attributable to softer conditions since 2010.

Demonstrating the difference in values between now and 25 years ago, in 1993, 98% of all house sales nationally transacted at a value under $400,000 and only 0.2% sold for more than $1 million.

Over the past twelve months, only 29% of houses nationally sold for less than $400,000 and 16% sold for at least $1 million.

Across Australia’s highest priced capital city, Sydney, twenty five years ago only 0.8% of houses sold above the $1 million mark, whereas over the past year 50% of all house sales had a price tag of at least $1 million.

What could the future hold?

If property prices were to rise at the same rate as the past twenty five years, Australia’s median house value would reach $2.9 million by 2043.

While the past isn’t always the best predictor of the future, it’s a worthwhile benchmark to consider where housing values may be twenty five years from now.

Based on national house values rising at the annual rate of 6.8% per annum over the past quarter of a century, in 2043, the national median house value would be approaching the $3 million mark ($2.93) and the median unit value would be just over $2.1 million ($2.15).

While it’s hard to fathom, if we saw the same rate of capital gains as what was recorded over the past twenty five years, Sydney’s median house value would be $6.35 million in 2043 and the typical unit would be worth $3.47 million.

Melbourne’s median house value would be approaching $6 million ($5.82) while the median house value in Brisbane would be $2.24 million.

Obviously these simple extrapolations don’t take into account how economic and demographic conditions might play out over the next twenty five years or how housing demand and supply may evolve; so there is a real possibility that housing trends and growth rates could look remarkably different to what we’ve seen over the past twenty five years.

Some more interesting findings from the Aussie Homes Loans Report:

Strong housing market conditions have boosted household wealth over the past quarter of a century.

The housing market has shown some extraordinary changes over the past twenty five years, with conditions moving through five distinct growth cycles which have pushed national median house values 412% higher.

Over the same period, the ASX All Ordinaries index has risen by a substantially lower 261%.

While value growth has been remarkably diverse across the country, over such a long period of time, the cyclical differences in value growth and turnover have washed their way through the statistics.

Each of the capital cities have recorded annual growth in house values ranging from 5.9% to 8.1% over the past 25 years, while regional markets have generally shown a slightly softer outcome.

Twenty five years ago the typical house value nationally was just $111,500 and since that time values have risen by an average of 6.8% per annum to the current level of $571,400.

The typical Australian property owner who has held their house for the past 25 years would have seen an average dollar value increase of almost $18,400 per annum.

Of course, different regions have seen housing conditions track at different speeds.

The largest annual increase in housing values within a capital city over the past twenty five years has been in Melbourne where values have increased at the annual rate of 8.1% per annum.

Over the past twenty five years Melbourne house values have moved through seven periods where annual capital gains exceeded 10% per annum.

More recently, the Melbourne housing market has been in a mild downturn, highlighting that property values don’t always rise, but over a long term the cyclical nature of housing markets will typically provide a wealth boost.

Conversely, the lowest long term capital gains have been in Adelaide and Brisbane, where house values have risen at the annual rate of 5.9%.

The diversity in growth rates over a long period of time highlights the cyclical nature of the housing market, with dwelling values rising at different speeds from region to region and period to period.

For example, despite Brisbane recording one of the lowest rates of annual capital gains, the period between 2001 and 2004 saw Brisbane house values rising at more than 10% per annum; the lower rate of long term growth is largely attributable to softer conditions since 2010.


The average mortgage size has grown roughly at the same rate as housing values

With dwelling values moving higher, the average loan size has also shown a substantial increase.

In 1993 the average owner occupier loan size nationally was $81,500 and the figure has since risen to $388,100; an increase of 376%.

Twenty five years ago, borrowers in the ACT were holding the largest loans, averaging almost $97,000, however in today’s market the largest average loan sizes can be found in New South Wales ($445,500) and Victoria ($400,200).

Mortgage rates have reduced significantly since 1993.

Twenty five years ago mortgage rates were moving lower from their record highs.

Variable mortgage rates peaked at 17.0% in March of 1990 and by first quarter of 1993 they had reduced to 10.0%.

Today, the standard variable mortgage rate sits at 5.2%, the lowest rate since the 1960’s.

Mortgage serviceability rates have improved thanks to historically low interest rates, however affordability challenges remain.

The proportion of annual household income required to service a mortgage (based on a 20% deposit, a 25 year principal and interest mortgage and the average discounted variable mortgage rate) is currently tracking at approximately 36% compared with a recent peak of 51% of annual household income being dedicated to servicing a mortgage in June of 2008.

Although CoreLogic serviceability measures don’t extend back twenty five years, sixteen years ago, serviceability measures were lower despite mortgage rates being approximately 130 basis points higher.

With dwelling values rising most substantially in Sydney and Melbourne over the past two growth cycles, households are dedicating a larger portion of their annual incomes to servicing their mortgage repayments.

Households in Sydney are generally dedicating the largest proportion of their annual incomes to service a mortgage (49.3%) with Melbourne close behind at 42.6%.

Affordability is still a significant issue

The dwelling price to income ratio rose to new record highs in 2017 due to housing prices rising at a faster pace than household incomes.

This worsening trend in affordability was largely driven by the largest capital cities, Sydney and Melbourne, where housing values have shown the most significant increase.

Sydney’s dwelling price to income ratio is now tracking at 9.3, which means the typical Sydney dwelling now costs 9.3 times more than the median annual household income.

Affordability pressures are likely to be most pronounced across those segments of the market who have tighter budgetary constraints such as first time buyers who haven’t had the benefit of accruing equity in the housing market, and low income households.

Nationally, in order to raise a 20% deposit to buy a dwelling, households would need to dedicate an average of 134.5% of their annual gross income.

The proportion of household income required for a 20% deposit is substantially higher in those markets where value growth has been strongest over the past five years.

In Sydney, households would need to dedicate an average of 185.1% of their annual household income to raise a 20% deposit, while in Melbourne the figure is slightly lower at 159.7%.

Based on these numbers, households will generally require several years to raise a 20% deposit.

Anecdotally, more first time buyers are seeking assistance from benefactors such as their parents or siblings in order to enter the housing market with as large a deposit as possible.

First homebuyers make up a smaller component of housing demand

As dwelling values have shifted higher and affordability has become more challenging, first home buyers have found it harder to participate in the market.

Twenty five years ago, first time buyers accounted for approximately 22% of all owner occupier housing finance commitments.

While that proportion remained reasonably consistent until the year 2000, first home buyer participation in the market has generally been in decline since that time.

The exception has been periods of first home buyer stimulus, where grants and stamp duty concessions have been generous, first time buyer numbers have surged.

The current statistics indicate that first home buyers represent 17.4% of all owner occupier housing finance commitments, rising from a recent low point of 12.9% in late 2015.

Recent stamp duty concessions in New South Wales and Victoria have been a key driver of the rebound in first home buyer participation, while every state and territory has some form of incentive available for first home buyers, typically with greater incentives available for those building or purchasing a new property or those purchasing outside of the capital city.

Investors have become a larger component to housing demand

Investment trends have generally moved in the opposite direction of first home buyers, with investors becoming a larger component of housing demand over the past twenty five years.

In 1993, housing finance commitments for investment purposes accounted for only 20% of the market.

Fast forward to 2015, and investors as a proportion of housing finance reached an historic high, comprising 55% of the value of all new housing finance commitments.

Since that time there have been regulatory changes imposed by the prudential regulator, APRA, which has slowed investor participation in the market.

The latest data to March 2018 shows investors still comprise 42.8% of mortgage demand, more than double the proportion from twenty five years ago.

Urban density has increased as our population grows

The growth in property values over the past twenty five years has happened against a backdrop of ongoing densification across the capital cities, with higher density housing stock rising in prominence due to changes in town planning policies, changing consumer preferences and affordability factors.

Twenty five years ago, only 22.7% of all dwelling sales nationally were for units.

In today’s market units comprise 29.6% of all sales and in some cities where the densification trend has been more pronounced, higher density dwellings account for more than 40% of all sales.

Another example of the densifying urban landscape over the past twenty five years has been the reduction in vacant land block sizes.

In 1993 the average block size based on vacant lands sales nationally was 816sqm.

Developers have progressively reduced the typical block size over time to reach 541sqm in 2015 before land areas started edging higher to the current average size of 610sqm.

Across the capital cities, block sizes are generally smaller than the national average due to the scarcity of land and zoning regulations which allow for higher densities.

Adelaide and Perth show the smallest lot sizes, averaging approximately 379sqm and 375sqm respectively.

It’s still hard to imagine what property values in our future cities will look like.

If home values increase at the same annual rate as they have over the past twenty five years we will see a median dwelling value nationally of $2.9 million by the year 2043.

While that value looks astronomically high in today’s money, if the historic averages play out over the next twenty five years, Sydney values would be breaking the $6.3 million mark and Melbourne would be over $5.8 million.

One thing that is certain is that housing markets will continue to move through their cycles, with periods of growth, decline and steady values conditions.

History has shown that over time these cycles tend to smooth out the year to year volatility in growth rates.

A good example of this is the Melbourne housing market, which has shown the highest long term rate of capital gain, however house values in this city have been through five separate periods where values were declining on an annual basis over the past twenty five years.

Cities will continue to densify as the population grows and urban planning strategies seek to maximize the use of strategically located land and transport corridors, which means more Australians are likely to be living in higher density housing.

Innovative housing design is likely to increase in importance, with small living areas becoming more acceptable thanks to smarter design principles and better use of space.

With technology progressing at a rapid pace, there are likely to be more households taking advantage of flexible working arrangements where they can work remotely with rapid and reliable internet speeds, affordable telecommunications and less requirement to commute into a centrally located place of work.

This may see some housing demand deflected to the markets outside of the capital city boundaries where housing tends to be more affordable.

Additionally, with the eventual advent of driverless cars and rapid transit systems, commuting times from areas that were once considered to be outside of a comfortable travel range may become more popular with home-owners, thereby reducing demand to live close to the major working centres of the city.

There are likely to be a plethora of other evolutions in the housing market and housing demand that remain beyond the imagination.

It was less than ten years ago that the first iPhone was released and roughly twenty five years ago dial-up internet was only just becoming popular.

The likelihood is that advances in technology will continue to accelerate, promoting innovation in how we live and work.

Only time will tell, but the next twenty five years will certainly be an interesting ride.

But what we can be sure of is that the best investment locations will be in close proximity (say 10 – 20 km) to our 3 big east coast capital cities as the more affluent new generation of home buyers push up the values of well located properties, while the less affluent will be pushed further and further out from the main centres.

The importance of conducting a pest inspection before purchasing a property

One of the biggest financial investments in life is to buy a house for yourself. Purchasing one is nothing less than one of the biggest decisions you make in your life. Any potential home buyer always has check list of their various requirements and important features that they look for in a home.

One of the most important procedures before buying a home is the pest inspection. It is always good to make sure the house that seems to be your dream home is not going to be one of the biggest mistakes of your life.

To ensure you are making the right decision before purchasing a home, a pre-purchase inspection is essential. It will also help provide you with having the upper hand in negotiating with the seller.

A pre-purchase pest inspection aids you in finding out if the property you are about to purchase has a pest problem even though it might not seem like it at first.

Everything You Need to Know About Pre-Purchase Building Pest Inspection

As the name suggests a pre-purchase building pest inspection is an inspection to check on the risk/status of a pest problem in the property you intend to purchase.

In most scenarios a building inspection is conducted that provides a potential home buyer with a building inspection report before investing in the property. This helps them know the status of the building as per noticeable visual damage caused by pests. The report will not include if there are pests present in the property that can cause severe damage.

A pest inspection on the other hand helps identify if there is an existence of pests in the property before the purchase. A pre-purchase pest inspection helps you avoid the extra expense of potential damage caused by pests after the purchase of the property and having to pay for pest control. It also provides the benefit of negotiating on the price with the seller giving you an upper hand in the deal with the reports.

Importance of a Pre-Purchase Pest Inspection

Here are 3 major reasons you should consider getting a pre-purchase building pest inspection done before you invest your finances into the property.

  1. It helps you know the pest problems or status of the property beforehand.
  2. The report can be useful to help you negotiate for a lower price for the property with the seller as you may have to get some repairs or pest control done after purchasing the property.
  3. You can seek professional help beforehand to inquire about the seriousness of the pest problem and the adverse effects of the same in the near future in case you purchase the property.
  4. A professional can also provide you with an approximate amount that you will need to invest to resolve the pest problem so you know exactly how much money you are investing on a whole.
  5. It helps avoid future regret that comes from purchasing a property without researching well enough to notice more than just visual damage.

Benefits of Conducting a Pre-Purchase Building Pest Inspection

  1. Awareness

Ignorance is not always bliss and it is important not to hasten an important decision of investing in a house. Just visiting the house will not help you ensure there is no critical damage in the house you are going to purchase.

Having a professional inspect the house for pests and pest problems is a wise decision before investing your hard earned wages into a house. It is good to be well informed about every detail of the property especially the status of pests before you proceed with purchasing it.

  1. Value assessment

Pre-purchase pest inspection plays an important role in assessing the true value of the property you intend to purchase. It helps you judge if you are being provided with the best deal for your money considering the status of the property.

Pest problem are not always resolved easily and can take a big bite out of your wallet. It is good to ensure that the property you are purchasing will not be resulting in a hole in your pocket even after the purchase.

If the property seems overpriced as compared to its pest inspection reports, negotiation of price with the seller is easier based on the reports.

  1. Unseen flaws

Only a professional/expert can easily help identify the unseen flaws of a property before purchasing it, as there is always more than meets the eye.

A pre-purchase building pest inspection can help locate these unseen flaws and bring them to the knowledge of potential buyers to provide them with the information required to know the true depth of the matter and how the pest problems can be resolved.

  1. Knowledge of the overall investment

A pre-purchase building pest inspection can help you negotiate with the seller if there are existent pest problems that make the deal seem overpriced.

Considering the fact that you will need to also invest in resolving the pest problems, it might help the seller provide you with a more reasonable and budget friendly price for the property you intend to buy.

  1. Aid in Negotiations

Pre-purchase pest inspection reports help to equip you with the knowledge of the true value of the property you are buying. They can aid in price negotiations will the seller to help you acquire a better deal.

  1. Safety of your loved ones

The safety of your loved ones is what matters most overall. In order to make sure you are purchasing a property that does not have any unseen structural damage due to pest infestations it is good to conduct a pre-purchase pest inspection.

A few reports might even help you change your mind about the property instead of regretting it in the near future after the purchase. This is good as not every potential home buyer might chose to repair the damage and buy the home some might prefer not to purchase a place with any possible pest problem at all.

  1. Confidence in your decision

Many a times, one might still be unsure about the investment in a house. A pre-purchase pest inspection helps you remain assured that you have made the right decision for you and your family.

Professional Requirement

One needs to make sure they are choosing the right person for the job of inspection of their property. Only a professional with the expertise of pest problems can help you know the true pest status of the property as only they will know what to look out for in a property.

It is always better to be sure of the judgement by hiring a professional instead of trying to conduct the inspection yourself when you lack the skills of a professional.

A professional can also help you with resolutions and the estimate cost on resolving the pest issue or guide you on whether the property is worth your money or not. He will also need to ensure that the report is formatted and the content is drafted in compliance with Australian standards.

What are the things to consider before hiring a pre-purchase inspector?

Make sure that the person you choose has adequate insurance cover so that in case of any accidental occurrences you are not burdened with the extra cost of their medical expense.

The said inspection professional having an insurance cover also reflects as one who is aware of the duties and hazards of his job. Do a check on his or her professional background so that you have some concrete points to back their credibility and expertise.

Pre-purchase building pest inspection can never go wrong or leave you with regret. It is a key procedure to go through before purchasing the property to ensure complete satisfaction of the investment of your money.

How long does it take to do a building inspection

Buying a home, old or new, or having one constructed for your family is both an exciting and a stressful time. It’s mostly exciting when you picture your family living comfortably and happily, and making wonderful memories, in your new home.

But before you start this amazing new chapter, you have to go through the experience of having the house inspected by a professional building inspector.

So, what is a building inspection?

A building inspection presupposes that the house might have structural problems and, of course, discovering and dealing with such problems is the last thing you’d want when your family is eager to move in.

At the same time, it’s something you should prioritise to make sure that your family’s new home is structurally safe and sound, or, if you’re having the house built, to make sure that your contractor is complying with the proper building standards.

Do I really need a building inspection?

You should remember that a building inspection, no matter how stressful it might get, is a process that you should not rush. In fact, you should make sure, and even demand if necessary, that the building inspector you hired or hired by your realtor does a thorough and accurate job.

This means that you should also expect the worst. It is best, however, to identify any and all problems and potential problems so they can be dealt with immediately and properly. As you should already be aware, some building problems, when left unresolved/unrepaired could cost you more money in the long run and put your family at risk.

What types of building inspection services are there?

These are some of the most common types of building inspection services:

  1. Building Inspections
  2. Timber Pest Inspections
  3. New Home Stage Inspections
  4. Defect Inspections

One of the most common questions asked by home buyers is how long a building inspection usually takes. Depending on the size of the house and the issues that an inspector might find, the whole process can take between 90 minutes and two hours, or even longer.

What features will a building inspector assess?

Generally, a building inspector ensures that a house’s structural safety, accessibility, energy efficiency, and (in the case of a house under construction) adherence to the original building plans. The qualifications of your building inspector will determine exactly what the building inspection will cover. These are the common property features and issues that a qualified building inspector usually has on his checklist:

  • Structure
  • Foundations
  • Ceilings, walls, and retaining walls
  • Floors
  • Guttering
  • Eaves
  • Fencing
  • Electrical
  • Heating, ventilation, and air conditioning
  • Plumbing and drainage
  • Hot water system
  • Moisture problems
  • Asbestos
  • Pest problems
  • Maintenance issues


What should I do before a building inspection?

Prior to the building inspection, do your research (on the property and the location’s history) and write down the important questions that you might want to ask the inspector, as well as any concerns you might have.

Especially if you’re buying a house, knowing its condition is going to be an important factor in whether or not the price is right and in determining if a house is the right one for your family. You wouldn’t want your “dream house” to turn into a nightmare later on when hidden problems suddenly come out of the woodwork (pun intended) after you have moved in.

About the Author:

Sofia Colston works at River City Conveyancing in Brisbane, specialising in commercial and residential conveyancing.

Looking to buy, but unsure of the process? We’d love to help! Give us a call on 08 6254 6333 and we’d be happy to step out the process for you.

Whose name to put it in your options when purchasing a property

Most property buyers, even seasoned investors, default to simply buying the property in their own name, but this is not always the best and most financially savvy choice.

The legally recognised owner of a residential property can be a personal name or two or more people; a company; a trust or a self-managed super fund (SMSF).

The best option for you depends entirely on your individual circumstances and goals.

There are plenty of factors that come into the ownership structure, including simplicity, asset protection, tax benefits, financing, estate planning, future wealth or business growth.

When you look at it this way, it’s easy to see then how this decision can quickly become complicated.

While it is possible to change the ownership structure at a later date, this can be costly and usually triggers payment of stamp duty and capital gains tax.

That’s why it is important to decide on the most suitable form of ownership upfront, and this will usually involve consultation with your accountant or financial advisor to determine the best name to buy in.

Your options may include:

Your personal name

The majority of residential property owners appear on the title with their own name, occasionally in conjunction with a partner.

Buying the property using a personal name enables owners to claim a full Capital Gains Tax (CGT) exemption when you sell.

It is also simple and easy to finance.

Investors who have a high income and want to reduce their tax bill using negative gearing can find owning a property in their own name beneficial, but if they sell their property or it becomes positively geared, keep in mind that they will have to pay tax on that income at their high personal tax rate.

Company name

While purchasing an investment property in the name of a “Pty Ltd: company is an option, the specifics are quite complex and it is worth getting professional advice first but generally, this can be the preference of companies looking to purchase their own corporate premises.

It is generally not suitable for owner-occupiers or residential property investors to buy a property in a company, because it will not be eligible for the full CGT exemption available, it is harder to get financing and you risk losing the property if your company gets sued.


Buying a property as a trust is an increasingly common ownership structure for residential property investors, for myriad reasons: it offers tax benefits, provides asset protection and can be a smart way of estate planning, to name a few.

A trust can be comprised of individuals or companies who are nominated beneficiaries, but they are not actually considered owners of the assets.

Many investors do this as a form of asset protection as if litigation occurs against one of the beneficiaries of the trust (YOU!), the assets of the trust are not at risk.

Owning a property through a trust can reduce the amount of tax you have to pay on the profits.

You can choose how to divide the profits between the beneficiaries and if you distribute then according to those with the lowest marginal tax rate, it can work in your favour and lower your taxable income.

On the other hand, a trust only distributes profits, not losses.

This means that negative gearing cannot be used to lower your taxes; you will have to wait until the property becomes positively geared or is sold.

A trust is most viable when you are looking to hold the property long term.

There are a number of different types of trusts so it is important to speak to your accountant to determine the best fit for your situation.

Self-Managed Super Fund

As Australians become increasingly money savvy, they are beginning to manage their own super funds instead of leaving it to a third party.

Owning investment property through a Self-Managed Super Fund is often a good option for those who have already accrued a considerable amount of super. (Please seek independent advice to make sure this applies to you.)

Purchasing an investment property with a SMSF can be more difficult and more costly than purchasing as an individual.

There’s lots of government red tape and regulations to wade through and lenders often require a larger deposit, offer less favourable interest rates and have higher loan setup fees.

Clearly you need to working with a professional to ensure you keep within the strict parameters of SMSF laws.

One of the main benefits to buying residential property as a SMSF owner is the low tax rate: 15% on all money currently in the fund and 0% when it is taken out after retirement.

Owning through a SMSF is only suitable for property investors, because buying a property intended for personal use (living in it or a holiday home) is not allowed.

In summary

There are pros and cons to each ownership structure for residential properties and each has inherent complexities that affect its suitability.

To determine the correct ownership structure and therefore the name that will appear on the title document of your next property, discuss your situation and goals with your accountant to ensure the best and most profitable outcome.

Talk to a Naked Agent today to discuss your best options.

The ultimate checklist for evaluating a house

GUEST BLOG | Congratulations on your decision to buy a house! We know that reaching this milestone takes a lot of effort and determination, which is why you should be proud of yourself. We also know that for so many people, especially those who are new to real estate, the prospect of buying a house can be quite terrifying. Nobody wants to buy a money pit, which is why we’ve put together this ultimate checklist for evaluating a house.

Before we begin, we must mention that even though this list is quite comprehensive, you must not rely on it alone when you’re evaluating a house. You will need a much more thorough inspection, which is why we highly recommend you hire a house inspector. Their training, expertise, and experience will prove vital to your purchase.

Begin with Your Must Haves

Everyone has a list of must haves for their future home, so begin with that. Maybe you simply can’t live without a skylight? Or a yard for your beloved lab! Make a list of 5-10 must haves and use it as your main guide.

Environmental Hazards

There are four types of environmental hazards: chemical, physical, biological, and psychological. Here is what you will need to take into account when evaluating a house.

Chemical hazards:

  • Arsenic – a poisonous element which can be found in wallpaper, paint, and various pesticides
  • Asbestos – asbestos coating can be present in the water heating, and on pipes.
  • Heavy metals
  • Herbicides, fungicides, and pesticides – are there any on the property
  • Lead – under federal law, all houses offered for sale should be free of lead-based paint, but unfortunately, it is very common in older buildings.
  • Radon –a radioactive gas that naturally occurs in the environment and tends to accumulate in buildings. It is highly carcinogenic.

Physical hazards:

  • Drought
  • Earthquake
  • Floods
  • Pollution
  • Noise pollution

Biological hazards:

  • Air ventilation – poor indoor air quality has been linked to a condition called sick building syndrome, which includes symptoms such as headache, eye and throat irritation, fatigue, and nausea.
  • Mold and mildew

Psychological hazards:

  • Stress – heavy traffic and sound pollution among some of the things that can cause stress.
  • Violence – is the house located in a violent neighborhood?


  • Accessibility – work, entertainment, shopping, airport, etc.
  • Schools

Exterior of the House

  • Automatic doors – do they work?
  • Drain pipes and gutters – any leaks? Does the water go away from or towards the house?
  • Driveway – check for cracks. Ask about age.
  • Exterior siding
  • Fence, patio – check their condition.
  • Garage
  • Landscape – are there trees on the property? Are they healthy? Are they too close to the house?
  • Lot lines – compare the actual lot lines with the ones in the house papers
  • Roof – inspect thoroughly. Are the shingles curling up?
  • Windows – single or double pane?
  • Yard – check its condition. Are there ants? Weeds? Do you like the size of it?

Interior of the House

  • Carpet/flooring – does it need refinishing or replacing?
  • Electrical sockets – are they grounded? When where they last replaced? Are they enough?
  • Lighting – is there enough natural light in the house? Is there good overhead lighting?
  • Mystery switches – do you flip and switch and it does nothing? Ask about that.
  • Paint – do the walls need a fresh coat of paint?
  • Walls – check for water damage, cracks, tap on them.
  • Windows – do they open easily? Are they insulated?


  • Appliances – are the heating, water heater, AC, etc. in working condition?
  • Beams – thoroughly check condition of visible beams
  • Cracks – pay extra attention to the cracks in the basement, they are a sign of shifting foundation which can lead to a plethora of issues, from flooding to windows not fitting properly.
  • Electrical system – fuses or circuit breakers?
  • Light – is there any natural light?
  • Water damage – check for signs of water damage on the walls and ceiling.


  • General condition
  • Insulation – ask about insulation materials.
  • Mold and mildew – while mold can be hidden in the house, the attic is where it will really be noticeable.
  • Storage – can the attic be used for storage?
  • Ventilation
  • Vermin – check signs of vermin in the attic, as well as throughout the house.
  • Water damage – has the roof had any leaks? Has it ever needed repairing?


  • Bathtub – stained, chipped, new, old, big enough?
  • Color palette – will you want to repaint?
  • Drains – are they clogged?
  • Faucets
  • Fixtures
  • Mold and mildew
  • Plumbing – are the pipes old? Do they make any creaky sounds? Does the water come out rusty in the beginning?
  • Shower – separate from the bathtub, shower curtain or glass door.
  • Toilet – check the way it flushes. Does flushing the toilet affect the temperature of the shower and sink water?
  • Wall tiles – chipped, old-fashioned?
  • Water – is it hard water?
  • Water pressure – check it in the bathroom, as well as the kitchen.


  • Appliances – Check the fridge, microwave, dishwasher, oven, blender, etc. Are they included in the price of the house? Are they enough for you? Are they old? Still working? Do they need to be replaced?
  • Countertops – stained, chipped, moldy, cut, scratched?
  • Faucets – any dripping?
  • Gas pipes – how old are they? Does the kitchen have a pilot light or ignition starter?
  • Sink – chipped, dented, stained?
  • Storage – does the kitchen have enough storage for you?


Naturally, you are free to customize this checklist to your own liking! If there is anything you would like us to add to the list, feel free to drop us a line in the comment section below!

I’m livin’ in the 70s how the median price has changed

Are you always kicking yourself for not purchasing property 40 years ago, seeing how exponentially the prices have increased?

Let’s take a trip down memory lane and assume you bought your first home or investment property in 1975.

Across Australia’s capital cities in 1976, median house prices looked like this:

  • Sydney – $36,800
  • Canberra – $35,100
  • Melbourne – $32,900
  • Adelaide – $29,800
  • Hobart – $31,575
  • Perth – $33,000
  • Brisbane – $26,275

There’s a few interesting things that come out of these figures.

  1. How cheap property prices seem when you look back today (not that they seemed inexpensive at the time)
  2. Brisbane was the cheapest capital city 40 years ago, well behind Hobart and Adelaide.

It’s important to keep things in perspective, though.

The average wage in the mid 1970s was around $6,000, according to the Australian Bureau of Statistics, so the median Sydney house price was almost six times’ the value of the average annual income.

Forty years on, both wage and house prices are considerably higher, although they haven’t grown at a consistent pace.

Sydney’s median is now 27 times higher than it was in 1975; if wages had matched that pace, the average wage would now be $162,000.

Of course two of the big reasons behind this are:

  1. There are more two-income families (both partners working) today than there were 40 years ago, increasing disposable household income.
  2. Interest rates have virtually halved substantially; increasing affordability. The standard variable interest rate in 1976 was 9.88%, meaning you needed to pay twice as much interest to service the same dollar value of loan.

House prices today:

Median capital city property values at the end of October 2017 were as follows:

  • Sydney – $905,917
  • Melbourne – $710,420
  • Perth – $462,624
  • Canberra – $582,882
  • Brisbane – $490,525
  • Darwin – $437,910
  • Adelaide – $430,303
  • Hobart – $396,393

Knowing what you know now, who wouldn’t have liked to buy their parent’s house for what your parents paid years ago?

Wouldn’t it be great to have a crystal ball and take a peek into property markets of the future and see where real estate prices will be in another 40 years? In its absence, it’s a pretty safe bet to assume that in the long-term, property values will continue to grow, underpinned by our growing population and the general wealth of our nation.

It’s important to keep this in mind when you’re negotiating your next property deal, as squabbling over $2,000, $5,000 or even $10,000 in today’s dollars is unlikely to have a huge impact on your eventual wealth.

Buying smart, investing in strong growth locations and negotiating the best price for the current market conditions: these are the most important tenants of property investing.

Follow these steps and you’ll be less likely to lament ‘the one that got away’ in years to come!

If you’d like some more information about buying your next home or investment property, feel free to get in touch! We’d love to guide you through the process. Send us an email at brendan@nakededgerealestate.com.au, or give us a call on 6254 6333.

How much does a bathroom renovation cost

Renovating your bathroom can really boost the value of your home, and improve your in-home experience. Although a lot of people want to make this improvement to their house, not understanding the price of the remodeling is a major setback for many.

So how much does a bathroom renovation cost? The cost for a bathroom renovation in Australia can vary from a few thousand dollars for small renovations, to around $50,000 for something more luxury. Before you start peeling tiles off the shower, consider these four costs…

  1. Bathroom Remodeling Costs

The cost of your bathroom remodel depends greatly on your design plans. Perhaps you just want to replace a few of your outdated fixtures, or perhaps you’re planning on tearing everything out and starting from scratch. However, it’s worth keeping the range of prices for common bathroom pieces in mind – before the cost of installation:

  • Tiles will generally cost, at a minimum, $30 per square metre. Premium tiles can cost more than $150 per square metre.
  • A new toilet can range from about $120 for something basic, right up to over $1000.
  • A standard vanity will cost approximately $700, while if you’re looking for something a little more premium, you should expect to spend up to $1500.
  • You’ll likely spend between $600 – $1200 on a new shower enclosure.

Studies have shown that the average amount spent on a bathroom renovation is approximately $17,500, so expect to spend approximately this much if you’re planning a full renovation.


  1. So Many Choices!

Your bathroom renovation costs will have a lot of variables, we’ve listed some of the most important and common ones for you to consider below:

Material quality– Do you want tiles or linoleum? Do you want a glass or acrylic shower? The quality of the materials used will greatly affect the cost of your build.

Length of remodelling– How long does it take to do a bathroom remodel? Usually, labour takes two to four weeks. But for larger jobs where you’re changing the core structure of your bathroom, expect to take a bit longer.

Unexpected delays– If you have an older house you may discover asbestos in the walls or fundamental plumbing issues that need to be addressed before the renovation can go on. Delays can raise the price of your renovation, but often they are problems that should be addressed immediately whether you’re renovating or not.

Size of the job– If you’re planning to do a lot of tiling, reroute plumbing, resurface large areas, or alter circuiting, then the job is likely to take longer to finish and cost more money. Spend some time planning your renovation before you jump into it to ensure you make the most of your money.

  1. Planning Ahead & Choosing Contractors

When hiring contractors, make sure they aren’t over or under charging you per hour.  If they’re charging more than $80/hr, then you can probably find someone cheaper. Be wary if they’re charging less than $50/hr. It’s likely they are not experienced or even licensed to do the job, and they may end up causing more harm than good.

You can check if a contractor is licensed here.

Like any build, when renovating your bathroom, the key is to plan in advance. Make sure you get several quotes, analyse the costs of materials, and decide what you really need to change.

  1. More Bathroom Renovation Tips

Try using an online bathroom planner if you’re finding it difficult to decide how to remodel. Using a virtual planner is an easy way to visualise how your finished bathroom will look, and to figure out how much space you really have for all of the modifications you want to make.

If you only have a small bathroom to work with, choose light colours to make it appear a little bigger. Using light-coloured fixtures will also help the style of your bathroom to remain timeless. Choosing on-trend colours often means replacing them several years down the track. If you need additional space for towels, add hooks rather than cupboards as they help to avoid clutter.

Try a dimmer switch if you and your family have different lighting preferences, or indeed if your lighting preference depends on your mood. It’s not much fun taking a bath in harsh, fluorescent lighting, for example, so a dimmer switch can be a nice touch.


Finished renovating and ready to sell? We’d love to help you get the best price for your beautiful property. Contact Brendan Leahy today on 0439 998 867 for an obligation free appraisal.