Newcastle renovator Werine Erasmus says despite the spike in house prices, there are still smart ways buyers and sellers can make their real estate dollar stretch further.
In what is a record-breaking market, small changes for little cost could be worth thousands to your bottom line, she says.
The self-taught ‘flipper’, who has renovated more than 20 homes in 19 years, says success in a tight market comes down to making clever decisions about a property.
“I’m in the market for another home myself now, so I will be looking at the ripple effect.
“That means suburbs that have already boomed and are spoken about, I would look at its neighbour, the next suburb over, the one that is not talked about as much but is next door,” she said.
“I’m personally going to look at Kurri Kurri.
“It’s a bit further out but you now have Teralba and Booragal already booming, you’ve had Speers Point already boom, so I’d look a little further out.”
Werine usually looks for properties to flip at the same entry level price as a first home buyer, under $600,000.
“One of the reasons is that stamp duty is manageable at that price,” she said.
Her sage advice therefore begins with planning.
“Research – that’s number one,” she says.
“Houses don’t come with prices at the moment. You’ve got to go in with your own price which means you’ve got to do your research prior.
“You can’t rely on what the real estate agent tells you it is worth, the market is too hot and even they don’t know for sure what the prices are at the moment.”
Comparing apples for apples and knowing what you’re willing to pay and sticking to that price, is a good discipline, she says.
“Buy in a growing suburb,” she says.
“I always say to people if there’s a McDonalds and a Bunnings nearby you’re okay because those people have already done their research.”
For maximum return on a property, Werine advises looking for ways to add value to an existing address.
“If you don’t have a big budget go for something that’s structurally sound,” she says.
“Steer away from something that needs too much work.
“When you renovate you always want a $2 return for every $1 you spend.
Her comments come as property data group Corelogic announce Australia’s real estate market has broken a new record.
“The Australian dwelling market has reached fresh record highs for the past four months.
“The end of April marked the first time the total value of Australian housing broke the $8 trillion dollar mark,” CoreLogic’s head of research, Eliza Owen said.
“This puts Australian residential property at around four times the size of Australian GDP, and around $1 trillion more than the combined value of the ASX, superannuation and commercial real estate stock combined.”
CoreLogic data shows in the three months to April, national home values rose 6.8%, the highest quarterly dwelling growth rate since December 1988.
Homes are being sold faster than they have in almost 20 years too according to Corelogic data, which found between January and April 2021, the average time a house was on the market in Australia was 29 days, the lowest level since October 2003.
“The last house I sold a few weeks ago was in Booragal,” Werine says.
“I had it on the internet on Thursday, and on the Friday I had three offers.
“People had not even come to the open home.
“The market is very hot at the moment and people feel they just need to buy a home to get into the market.”
Werine says the sale of her latest project came down to two buyers, both young pregnant couples wanting a home before the birth of their baby.
“It’s tough for first home buyers right now, I really feel for them.
“There’s not much available under $600k.”
In her book ‘The Happy Renovator’ Werine offers tips, checklists, and advice to make renovation easier, quicker and more profitable.
Ultimately, she says, people must live within their means.
“My advice is only buy when you can afford it.
“Don’t get yourself into debt that you can’t get out of.”