Australian Property Market Update September 2025

0:00Welcome back to the deep dive. Today

0:01we’re uh tackling something absolutely

0:04fundamental to Australian wealth,

0:07the residential property market.

0:08It really is fundamental.

0:10We’ve got the latest chart pack here,

0:11September 2025. And I mean, these

0:14figures just underscore how critical

0:17housing is. It’s not just an asset

0:18class. It’s well, it’s the bedrock.

0:21Absolutely. And the scale we’re talking

0:22about, it really puts other investments

0:24into perspective when you dig in.

0:25Okay, let’s start with that headline

0:27number. The total value of Aussie

0:29residential real estate, it’s now

0:31sitting at, get this, 11.7 trillion.

0:3411.7 trillion is massive.

0:37Massive. And just so you get a sense of

0:38that scale, think about Australian

0:40superanuation, all our retirement

0:42savings, that’s $4.3 trillion and all

0:46the stocks listed on the exchange, $3.6

0:48trillion. So housing dwarfs them both

0:50combined.

0:51And that dominance is why we need to cut

0:53through the noise today. Our sources

0:55show housing makes up uh 55.9% of all

0:58household wealth.

0:59Almost 56%.

1:00Yeah. So, our mission here is to really

1:02unpack what’s happening, the recent

1:04growth trends, that tension between

1:06supply and demand, and crucially, how

1:09the latest economic data is shaking up

1:11the outlook for interest rates.

1:13And the immediate takeaway, the markets

1:15definitely got some wind in its sales

1:17again. National dwelling values really

1:19picked up steam, rising 1.8% in just the

1:223 months to August. That’s the biggest

1:24quarterly jump we’ve actually seen since

1:26the second quarter of 2024.

1:28Suggests maybe some of that earlier rate

1:30cut confidence is still filtering

1:32through.

1:32It certainly looks that way.

1:33Okay, let’s zoom in on that momentum.

1:35That 1.8% quarterly lift means values

1:38are up 4.1% nationally over the full

1:41year to August.

1:42Right.

1:42And it looks like the combined capitals,

1:45so the average across the big eight

1:46cities, they led the charge this quarter

1:48at 1.9%. just slightly ahead of the

1:51combined regionals which were at 1.6%.

1:54So fairly broad-based but capitals

1:56edging it out.

1:57But here’s something interesting, isn’t

1:58it? The type of property leading the

2:00growth seems to be shifting.

2:01Yeah, this is fascinating. For what,

2:03nearly two years, it was all about the

2:05affordable end, right? That bottom 25%

2:08of the market was where the action was

2:09driven by first home buyers presumably.

2:11Exactly. But in the 3 months to August,

2:14that flipped.

2:15Flipped how? Well, the middle 50% of the

2:17market actually outpaced the most

2:19affordable segment. The middle tier grew

2:22by 2.2%.

2:24Okay. Compared to

2:25compared to 2.1% growth in that

2:27bottommost affordable cortile. It’s a

2:30subtle shift, but it’s significant.

2:32What does that tell you? Does it mean

2:33maybe upgraders or established buyers

2:36are feeling more confident now?

2:38I think that’s exactly it. It suggests

2:40the uh the wealth effect might be

2:41broadening out a bit. It’s not solely

2:43first home buyers scrambling for

2:45entry-level properties anymore.

2:47So, demand hitting those mid-tier price

2:49points,

2:50right? People feeling maybe secure

2:51enough in their own equity to make that

2:53next move. It points to wider

2:55participation.

2:55And you can see that confidence playing

2:57out in the auction numbers, too, which

2:58are always a good like immediate health

3:00check.

3:01Definitely. The 4-week rolling average

3:03clearance rate hit 69.5% in August.

3:06That’s its highest point in uh over two

3:09years.

3:09Wow. Almost 70%.

3:11Yeah. Basically, seven out of 10 homes

3:13going to auction are selling. And that

3:15one week ending August 24th was

3:17particularly strong. It actually hit 70%

3:20on the dot.

3:21You don’t see numbers like that in a

3:22weak market, do you?

3:23No, absolutely not. It signals strong

3:25seller confidence and crucially buyers

3:27meeting those expectations.

3:29Okay, so we have that national picture

3:311.8% growth quarterly. But as always,

3:34Australia isn’t really one single

3:36market. Is it that average hides some

3:38pretty dramatic differences between the

3:40cities?

3:40Oh, completely. It’s a less one big tide

3:42and more, you know, several distinct

3:44currents moving at very different

3:45speeds. We’ve got clear frontr runners

3:47really pulling that national average up.

3:49Which cities are really driving things?

3:51Well, you’ve got markets sitting at

3:52record highs right now. Brisbane is a

3:54standout. 3.0% growth just in the

3:56quarter and that takes its annual rise

3:58to 7.9%.

4:00Strong,

4:00Barry. Perth is right up there, too.

4:023.1% quarterly growth, 6.6% annually.

4:05Both very robust.

4:07And then there’s Darwin.

4:08Darwin’s just exploded. 5.0% growth in

4:12the quarter. That’s huge. And it gives

4:14it a massive 10.2% annual increase.

4:175% in 3 months. Is that sustainable

4:19though? Or is Darwin maybe a bit of a,

4:22you know, smaller market anomaly?

4:24That’s a fair point. Darwin is much

4:25smaller, less liquid, so you can get

4:27these big percentage jumps. But even if

4:29you focus on the larger eastern

4:30capitals, the split is clear.

4:33So who are the lagards then?

4:34Melbourne is definitely lagging behind

4:36the pack. Growth was really modest, just

4:381.0% 0% over the quarter. And

4:40importantly, Melbourne values are still

4:413.0% below their previous peak back in

4:44March 2022.

4:46Still underwater from that high. What’s

4:47holding Melbourne back, do you think?

4:49Still affordability pressures, I’d say,

4:51and maybe relatively higher stock levels

4:53compared to somewhere like Perth. But

4:54the real outlier, the one really

4:56dragging its feet is Hobart.

4:57Hobart. What’s happening there?

4:59Values actually went backwards over the

5:00quarter down Manico. 6%. And they’re

5:03still slightly down over the year, man.

5:052%.

5:05Wow.

5:06Yeah. And at Hobart, values are now

5:07sitting a full 10.4% below their peak

5:10from March 2022. That’s a pretty

5:12prolonged correction they’re

5:13experiencing.

5:1310% down. That’s significant. So, if we

5:17want to see where the heat is right now,

5:19the very latest data.

5:20The rolling 28-day index, which takes us

5:22up to September 9th, really confirms

5:24that concentration. Brisbane’s leading

5:26the charge among the majors, up 1.3% in

5:29just 28 days. Okay. followed by Perth at

5:321.1% and Adelaide also showing strength

5:35at.9%. So yeah, the heat is very very

5:37localized in those specific markets.

5:39Okay, so prices are diverging, but what

5:41about actual sales activity? Are people

5:43still buying and selling?

5:44Yeah, nationally sales volumes are

5:46actually holding up reasonably well.

5:47Over the last 12 months, total sales

5:49were around 538,000. That’s actually

5:522.0% higher than the previous year.

5:54So activity is still there.

5:55It is. And Darwin may be benefiting from

5:58that price surge we mentioned. saw

5:59annual sales estimates almost 70% above

6:02its long-term average. Big jump there,

6:03right? But here’s where it gets a bit

6:05weird, isn’t it? You’ve got solid sales

6:07volumes, prices rising in many places,

6:10but properties are taking longer to

6:12sell.

6:13Yes, that’s the friction point. It seems

6:15a bit paradoxical.

6:16The median time on market nationally, it

6:18rose from 29 days back in the April

6:21quarter to 33 days in the August

6:24quarter. Why would things slow down if

6:26demand is apparently strong? I think it

6:28comes back to that inventory crunch

6:30combined with buyers being maybe a bit

6:32more cautious or discerning because

6:34borrowing is expensive.

6:35Okay,

6:36they’re keen, but they have limited

6:38choice and they’re perhaps negotiating

6:39harder or taking longer to commit. You

6:42see the extremes really clearly. Perth

6:44is still lightning fast property selling

6:46just 14 days median

6:48shows that intense demand.

6:50Exactly. But at the other end, CRA

6:53properties are sitting on the market for

6:54a median of 54 days.

6:5654 days. That’s a long time.

6:58It really is. It points to a mismatch

7:00between what sellers are asking and what

7:02buyers are willing or able to pay in

7:05that specific market.

7:06But underlying all this price pressure,

7:08the root cause seems to be supply or

7:10rather the lack of it.

7:12Absolutely. It’s the listings crisis

7:13essentially. Total available stock for

7:15sale is just plummeting. It’s now

7:17sitting uh 20.2% below the 5-year

7:20average.

7:21Wow. A fifth below normal levels.

7:23Yeah. And even though new listings

7:24picked up a bit in August, up 9.4%,

7:28they’re just being soaked up much faster

7:29than they’re being added. The overall

7:31pool of available homes is shrinking.

7:33And that low stock, that lack of choice

7:36must be shifting the power back towards

7:38sellers. Right.

7:39Definitely. When buyers have fewer

7:40options, sellers can hold firmer on

7:43price. We see that directly in the

7:45vendor discounting figures.

7:46That’s the gap between the asking price

7:48and the final sale price.

7:49Exactly. Nationally, that median

7:51discount has tightened slightly. It’s

7:53down to 3.3%, which is lower than the

7:55recent high of 3.7% back in January.

7:58Sellers are having to give away less.

8:00And I bet that varies by city, too.

8:01Oh, absolutely. Look at Brisbane, our

8:03high-f flyier market. Discounts there

8:04have tightened significantly down to

8:06just 2.7%. Very little legal room.

8:08Whereas Hogart,

8:09Hobart, our lagging market, still has

8:11the largest discount sellers there, are

8:14typically knocking off 4.4% for their

8:16initial asking price. It’s a perfect

8:18indicator of local market conditions.

8:21Okay, so this chronic shortage of homes

8:23for sale, it doesn’t just impact buyers.

8:25It must be putting immense pressure on

8:27renters, too.

8:28Huge pressure. And we’re seeing rental

8:30growth momentum building again right

8:32across the country. National rents are

8:34up 4.1% over the year.

8:36Is that driven by cities or regions?

8:38Actually, regional rents are still

8:40outpacing the capitals. They saw a 5.8%

8:43annual rise compared to 3.4% to 4%

8:45across the combined capital cities. The

8:48pressure is everywhere, but particularly

8:49acute regionally.

8:50And is there any relief coming from the

8:52construction side? Are we building

8:53enough new homes?

8:55Well, unfortunately, no. The pipeline

8:56looks pretty weak, actually. Dwelling

8:58approvals, which are a lead indicator

9:00for future supply, they dropped 8.2% in

9:03July.

9:04And that was led by a really steep fall

9:06in approvals for units and apartments,

9:08down 18.8%.

9:09So, the denser housing we arguably need

9:11more of isn’t getting approved.

9:13Exactly. and overall approvals are

9:15running substantially below the uh

9:18roughly 20,000 per month level that’s

9:20considered necessary to meet the

9:22government’s national housing accord

9:23targets.

9:24So that supply shortage looks set to

9:26continue fueling both sale prices and

9:28rents.

9:29It certainly seems baked in for the

9:31medium-term which makes it interesting

9:33to see who is managing to buy in this

9:35market,

9:36right? Who’s borrowing?

9:38Investors played a big role in lifting

9:39loan commitments over the last quarter.

9:41lending to investors was up 3.5%.

9:44They now make up a pretty elevated share

9:46of the total loan value around 37.7%.

9:49Almost 38%. Where are they most active?

9:52Particularly prominent in those markets

9:53showing strong capital growth potential.

9:55So, Western Australia, the Northern

9:57Territory, and Queensland stand out.

9:59But the big news, the thing that could

10:01really shake up the buyer profile almost

10:03immediately is the change to the first

10:05home buyer guarantee scheme. Right.

10:07Yes. This is huge. The expansion of the

10:09scheme kicking in October 1st with

10:11higher price caps, it’s a potential

10:14gamecher for accessibility.

10:16What does it mean in practical terms?

10:17How many more properties qualify?

10:19It’s a massive jump. Under the old caps,

10:22our analysis showed only about 33% of

10:25housing unit markets across the country

10:27qualified for the 5% deposit scheme.

10:29Okay. One/3.

10:30Under the new higher caps, starting

10:32October 1st, that figure jumps to 63.1%.

10:36Wow. from 33% to over 63%.

10:39Yeah, almost twothirds of markets

10:41nationally will now be accessible under

10:43the scheme. It basically unlocks vast

10:45swaths of the market for first home

10:47buyers who couldn’t previously use it.

10:49That is a dramatic policy impact. And

10:51what about units specifically? Is it

10:53even higher there?

10:54For units, it’s almost universal

10:55coverage now. 93.7% of unit markets

10:58nationally fall under the new price

11:00caps.

11:00So nearly every unit market is now

11:03potentially accessible via the 5%

11:05deposit scheme. That’s going to

11:06concentrate a lot of demand surely.

11:08You have to think so. It directs a whole

11:10cohort of buyers towards those specific

11:12newly accessible properties.

11:14Okay. So, we’ve got this market with

11:15rising values in places, chronic low

11:17supply, and now this sudden boost to

11:19first home buyer demand. But hanging

11:21over all of it is the big question mark,

11:23interest rates.

11:24Exactly. And the outlook there has

11:26become a lot cloudier recently. After

11:28the RBA delivered its third rate cut

11:29earlier in the cycle, there was quite a

11:31bit of market speculation, wasn’t there?

11:33Yeah. Hopes were high for more cuts.

11:34maybe taking the cash rate down to what

11:363.35% by the end of this year.

11:38That was the thinking. But that optimism

11:40is definitely uh fading fast now.

11:43Why? What’s changed?

11:44Two key pieces of economic data came in

11:46surprisingly strong. Basically pouring

11:48cold water on the need for more

11:49stimulus. First, inflation.

11:51Okay.

11:52The RBA’s preferred measure, the annual

11:54trimmed mean inflation, which smooths

11:57out volatile items. It actually rose to

11:592.7% in July. still inside the two

12:02three% target band but

12:04but heading firmly towards the top end

12:06of that band it reduces the argument for

12:08cutting rates further to boost inflation

12:10right and the second factor

12:12the June quarter GDP numbers economic

12:14growth came in stronger than almost

12:16anyone expected the economy grew 6% in

12:18the quarter

12:19which translates to

12:20an annual growth rate of 1.8% and

12:22crucially that was significantly higher

12:25than the RBA’s own forecast back in

12:27August they’d only predicted 1.2% 2%

12:29annual growth.

12:30So, the economy is actually more

12:32resilient than the RBA thought. Driven

12:35by what?

12:36Mostly household consumption holding up

12:38and strong exports. It just shows the

12:41economy has more underlying strength

12:43than previously assumed, reducing the

12:45need for the RBA to prop it up with

12:47cheaper money.

12:48And the RBA governor has responded to

12:50this.

12:50She has. Governor Bulock gave a pretty

12:52clear warning recently. She basically

12:55said, and I’m paraphrasing slightly, but

12:57effectively, if this strong economic

13:00data keeps coming in, then uh there may

13:03not be many interest rate declines yet

13:05to come.

13:05That’s a fairly direct message to the

13:07market. Manage your expectations.

13:09Absolutely. It really dampened those

13:11hopes for a quick return to

13:13significantly lower rates.

13:14And are we seeing this uncertainty

13:16reflected in actual borrowing costs yet?

13:19We are in an interesting way. While

13:21standard variable rates for owner

13:23occupiers have drifted down slightly,

13:25maybe following the earlier RBA cuts,

13:27now sitting around 5.75%.

13:29Okay.

13:30Long-term fixed rates, especially for

13:31investors locking in for more than 3

13:33years, they’ve actually gone the other

13:34way.

13:34They’ve gone up despite the RBA cuts.

13:37Yep. Investor fixed rates for terms over

13:393 years have increased by 13 basis

13:41points since January. They’re now

13:43averaging around 6.65%.

13:45What does that tell you? Banks pricing

13:47and future risk. It suggests the banks

13:50believe that maybe rates won’t fall as

13:51much or stay low for as long as the

13:54market was previously hoping. They’re

13:56building in a buffer for longerterm

13:57funding costs. Hashtag #outro.

14:01Okay, so let’s try and pull this all

14:02together. We’ve dived deep into the data

14:04and the picture that emerges is well,

14:07it’s full of tension, isn’t it?

14:09Definitely.

14:09On one hand, you have this incredibly

14:11valuable asset class, 11.7 trillion

14:14underpinning household wealth. We’re

14:16seeing accelerating price growth again,

14:18particularly in key markets like

14:19Brisbane and Perth,

14:21driven higher by that critical shortage

14:22of supply. Total inventory is incredibly

14:25tight, more than 20% below the long-term

14:27average. It’s a real pressure cooker.

14:29But that pressure cooker environment is

14:30now operating under this cloud of

14:32uncertainty about interest rates. The

14:35surprisingly strong economy means the

14:36RBA might just keep rates on hold or at

14:39least cut less than people hoped.

14:41Exactly. the economic reality is pushing

14:43back against those rate cut

14:45expectations. Which leads us to, I

14:48think, a really important final thought

14:49for you, our listener, to consider.

14:52Okay, what should we be mulling over?

14:54Well, think about that massive almost

14:56overnight jump in first home buyer

14:58accessibility because of the expanded

15:01guarantee scheme suddenly making nearly

15:032/3 of markets available to them.

15:05Right, that 63.1%

15:07figure. Combine that sudden surge in

15:09potential demand with the severe

15:11shortage of total listings we just

15:12talked about, that 20% deficit. How

15:15might this big influx of newly qualified

15:17buyers likely targeting those lower to

15:20middle value properties that are now

15:21within reach? How might that impact

15:24price momentum in those specific

15:25segments? And maybe think about which

15:27capital cities, given their current

15:29supply levels and affordability, might

15:31feel that new wave of demand pressure

15:32the most intensely as we head into the

15:34final quarter of the

0:00Welcome back to the deep dive. Today

0:02we’re tackling something huge in

0:04Australian property. That big question,

0:07renovate or buy readymade.

0:10It’s the question, isn’t it? Is it’s

0:11still worth the uh the blood, sweat, and

0:14frankly the massive cost of doing up a

0:16place.

0:16Or it’s the smart money now just saying,

0:18″Look, I’ll pay the premium. Just give

0:20me the keys.”

0:20Exactly. And that’s our mission today.

0:22We’re digging into market data right

0:24across Australia up to August 2025.

0:27Right. trying to find where the profit

0:29actually is anywhere and understand why,

0:32you know, convenience is suddenly king.

0:34Okay, let’s start where most people do.

0:36You love your street, the schools are

0:37great. Renovating seems like the obvious

0:39way to avoid moving costs, right?

0:41Oh, absolutely. Those costs are brutal.

0:43Think about South Australia. Minimum 5%

0:45of the property value just in

0:46transaction fees gone.

0:48Ouch. Yeah. So yeah, staying put and

0:51changing the house to fit your needs,

0:52getting that dream floor plan, it makes

0:55a lot of sense on paper, avoiding

0:57disruption.

0:58But then you hit the financial wall, the

0:59cost. Let’s talk about construction

1:01costs because that’s the elephant in the

1:03room.

1:03Well, there’s sort of good news and bad

1:04news. ABS data to March 2025 shows the

1:08rate of increase has slowed right down,

1:10only 1.1% annually.

1:12Okay, 1.1%. That sounds manageable.

1:15Trades are easier to get now, too,

1:16apparently.

1:16Easier, yes. But that 1.1%

1:20it’s a bit misleading. I think it just

1:22means the crazy price explosion stopped.

1:25We’re still starting from a much much

1:26higher cost base than say 5 years ago,

1:29right? So doing a kitchen or bathroom

1:31today, it’s still way more expensive.

1:33Dramatically more expensive. No

1:35question.

1:35So why then? Why are buyers paying even

1:38more for a house that’s already done? If

1:40the Reno cost base is high, surely the

1:42finished product reflects that plus a

1:44profit margin. Because they’re not just

1:46paying for materials and labor, they’re

1:47buying certainty.

1:48Certainty. Okay.

1:49They’re paying to avoid the stress, the

1:50time off work, the budget blowouts, the

1:53dodgy tradies, the material delays, all

1:56that chaos, that peace of mind. That’s

1:58what the premium is for. It’s risk

2:00mitigation.

2:01And people are really valuing that risk

2:02mitigation. I mean, look at the spending

2:04in Sydney.

2:04It’s huge. Greater Sydney saw renovation

2:07spending hit what? $3.01 billion just up

2:11to May for fiscal year 25.

2:13Yeah. already more than the entire

2:15previous financial year,

2:16which was $2.83 billion. So, massive

2:19activity,

2:20but we need to be clear on terms here,

2:21right? Renovation versus extension.

2:23Good point. Yeah, the sources

2:24distinguish this. Renovation is

2:26improving what’s already there inside

2:28the existing walls, new kitchen, new

2:30bathroom, paint, floors.

2:32Okay?

2:32And extension actually makes the house

2:34bigger, expands the footprint, and

2:36getting finance for those two things

2:37very different. Banks see extensions is

2:40much riskier,

2:40right? simpler to get a loan for an

2:42internal facelift than adding a whole

2:44new wing

2:44pretty much.

2:45So, okay, high cost buyers want

2:48certainty.

2:50If you are going to do a major

2:51renovation, how do you actually make

2:53money? Is there a secret sauce?

2:55There is a strategy that seems to work

2:57particularly at the higher end. It’s not

2:59just about spending. It’s about being

3:01clever with the existing space,

3:03adding bedrooms and bathrooms,

3:05but crucially doing it by reconfiguring

3:07the current layout, not necessarily

3:09extending. That bumps the property into

3:11a whole different value category.

3:13Oh, yeah. Okay. Like that Glen Haven

3:14example you mentioned, 32 Gleni Place.

3:16Exactly. That’s the poster child.

3:18Mhm.

3:18Bought for $2.71 million.

3:21Right. And they did a full internal and

3:23external job.

3:24They did. And they were smart. They took

3:26old formal rooms, you know, the separate

3:28dining, the lounge nobody uses, and

3:30turned them into a massive new main

3:32bedroom suite, plus another in suite.

3:33So, they didn’t make the house bigger,

3:35just repurpose the space.

3:36Correct. Went from a five bed, four

3:38bath,

3:39correct,

3:39sixbedroom, sixb luxury home.

3:42Wow. And the result, 11 months later,

3:45sold for $4.4 million.

3:47Get out. That’s what $1.69 million more.

3:50A 62% uplift. That’s strategic

3:53renovation paying off big time. Okay,

3:55hang on. A $1.69 million profit. Surely

3:58that relies heavily on the whole market

4:00rising during those 11 months. That

4:02feels like a big gamble, especially at

4:03the top end.

4:04It is a gamble. Absolutely. And that’s

4:06the catch. You have to know your market.

4:09Glenn Haven supports that kind of large

4:11luxury home. Try that same renovation in

4:13a suburb where people want smaller, more

4:16affordable places.

4:17Disaster. You’d over capitalize

4:18massively.

4:19Completely. You need recent sales

4:21evidence that proves buyers in that

4:24specific spot will pay top dollar for

4:26what you’re creating.

4:27So that desire for certainty is pushing

4:30things in interesting directions. Even

4:32huge rebuilds like that place on the

4:34lower northshore, 56 Warren Road,

4:36North Willoughby. Yeah.

4:37Yeah.

4:38They knocked down the original house

4:39entirely

4:40and built two high-end duplexes instead.

4:42Exactly. And one side sold for $5.751

4:44million. That tells you established

4:47families, downsizers, they want the

4:49premium features, lifts, pools, basement

4:51parking, and they want it done. No

4:53construction headaches.

4:54They’ll pay almost 6 million bucks to

4:56avoid the build risk themselves.

4:57Incredible.

4:57The premium for certainty.

4:59Okay, that works at a luxury end

5:00clearly. But what about the rest of us?

5:03Midmarket, Southwest Sydney, for

5:05instance, the margins must get squeezed

5:07there.

5:08Squeeze is an understatement.

5:09Yeah.

5:10Yeah. This is where it gets really tough

5:11for the average person trying to flip or

5:14add value. So, so take Echel Park. The

5:16analysis there showed,

5:18right? They compared similar three

5:19betterers, one renovated, one not. The

5:21difference in sale price only $133,500.

5:26Once you take out renovation costs,

5:28holding costs, your time, your stress,

5:31is that even worth it?

5:32That’s discouraging, isn’t it? Hard to

5:34see the profit margin justifying the

5:36risk and effort there.

5:37And it gets even worse in the inner

5:38city, right? Places like Paddington, Red

5:40Fern, traditionally prime flipping

5:43territory.

5:44Used to be, but the high prices now mean

5:46your holding costs are enormous.

5:49Interest rates, land tax,

5:51while the property is empty being

5:52renovated.

5:52That Paddington example was telling 155

5:55Paddington Street. They made a gain on

5:57paper, sure.

5:58But the source pointed out that the

5:59median price in Paddington went up by

6:01about 53% in the same time it took to

6:03renovate that place.

6:04So, the market itself did most of the

6:06heavy lifting

6:07pretty much. And think about it, if the

6:09market’s rising that fast, your bleeding

6:12cash on holding cost, maybe six figures,

6:14just vanishes before you even factor in

6:16the Reno budget.

6:17So that paper profit, it gets eaten up

6:19really fast. You need a truly huge value

6:21ad just to beat passively holding the

6:24property.

6:24Exactly. Very difficult in those

6:26expensive, fast-moving markets.

6:28So if big structural changes are risky

6:30and expensive, where’s the safe bet?

6:32What does work reliably for the everyday

6:34renovator?

6:35Cosmetics. It always comes back to

6:37cosmetics. Okay.

6:38The analysis consistently shows quick,

6:40high impact updates still offer great

6:42bang for your buck, maximizing sale

6:44price or boosting rent.

6:46We’re talking paint, new carpet.

6:48Yeah. Fresh paint, new floor coverings,

6:49maybe update the taps, new toilet

6:51systems, maybe a quick, relatively

6:53inexpensive kitchen or bathroom refresh

6:55if needed. Nothing too structural.

6:57Basically, make it look clean, modern,

6:59and movein ready without breaking the

7:01bank or the walls like that warwood

7:03place. 41 Kalistamon Way.

7:05Perfect example. Simple cosmetic stuff,

7:08shutters, floors, kitchen refresh led to

7:10a decent solid uplift. Not spectacular

7:13like Len Haven, but profitable,

7:15right? And don’t forget the rental

7:16angle.

7:17Absolutely critical point. Renovating

7:19purely for rental return is a different

7:21game, especially in super tight markets.

7:24Think Darwin.3% vacancy rate.

7:26Wow. 3%. Basically nothing available.

7:29Or somewhere like Lismore, sadly post

7:31floods, you can potentially buy low,

7:33renovate for durability and rental

7:35appeal. get great rent and claim

7:38depreciation. It shifts the focus from

7:40capital gain to cash flow.

7:42A totally different strategy. Okay,

7:43let’s look beyond the East Coast bubble.

7:46Regional markets play by their own

7:47rules. What unique opportunities are out

7:49there?

7:49Well, Western Australia is booming.

7:51Perth, especially strong growth, not

7:53enough houses. So, renovation looks

7:55pretty attractive there.

7:56Any examples jump out?

7:57Ferndale, a 1970s place bought for 545K,

8:01full internal external Reno, sold less

8:03than a year later for $850K. Nice.

8:06That’s around a 50% jump. Much lower

8:08entry price than Sydney, too.

8:09Definitely. Then you look at Melbourne

8:10and it’s like two different cities.

8:11Interfa

8:14buyers want the unrenovated character

8:16homes. They’ll pay for the land and

8:18location and take on the project

8:19themselves

8:20because it’s all about the address.

8:21Precisely. But head out west. Tarnite

8:24Melton, totally a different story.

8:26Buyers there overwhelmingly prefer brand

8:28new homes. They want the convenience,

8:30the builder warranty, modern designs.

8:33Older sock is harder to shift.

8:35Fascinating contrast. What about up

8:37north? Darwin sounds unique.

8:39Darwin’s got its own set of challenges

8:41for sure. Materials are expensive

8:43because it’s remote. There’s a shortage

8:44of trades and the wet season basically

8:47shuts down building for 3 months.

8:48Nine months a year to get anything done.

8:50That’s tough.

8:51It is. So, the smart renovation there,

8:53that’s a local trick.

8:54Elevated homes. Most houses are built

8:56high off the ground. The popular Reno is

8:59to build in underneath at a

9:00self-contained granny flat. Ah, adds

9:02versatility and income potential.

9:05Huge income potential. You can rent that

9:07granny flat out for maybe $300 a week,

9:09sometimes more, leveraging those really

9:11high Darwin rents. It makes financial

9:13sense.

9:13Clever. And for the real hands-on types,

9:17the dedicated flippers, where can they

9:19still make decent money?

9:21You need to look at the more affordable

9:22regions. Rockampton came up as a good

9:24example. Okay, if you can do the work

9:26yourself, the margins are still there.

9:27One example, 7 Killllan Street.

9:30Bought for 320 cares,

9:32right?

9:32Put about $90 into it. Mostly cosmetic

9:35stuff, paint, fencing, kitchen update.

9:38Sold 6 months later, gross profit,

9:40$117,000.

9:42Wow. But the key is did the work

9:44yourself.

9:45Absolutely essential. That profit

9:47disappears fast if you’re paying trade

9:49rates for everything. That model relies

9:51almost entirely on your own skills and

9:53sweat equity,

9:54which contrasts completely with, say,

9:56the Shaw Haven Coast.

9:57Totally. Down there, everyone knows how

9:59hard it is to get materials and find

10:01good tradies.

10:02So buyers are actually willing to pay a

10:04big premium for a place that’s already

10:05beautifully renovated

10:06because they don’t want the hassle.

10:08They just want to move in and enjoy the

10:09coastal lifestyle. Nothing limited to do

10:11is the ultimate selling point.

10:13Convenience again.

10:14Okay, let’s pull all this together.

10:16What’s the essential advice for you, our

10:18listener, navigating this tricky market?

10:21Seems like two main paths to profit

10:23emerge.

10:24Yeah, I think so. Path one is what we

10:26could call long-term lifestyle. This

10:28works best for owner occupiers, people

10:30staying put, right?

10:31You renovate primarily for your own

10:33enjoyment to make the house work better

10:35for your family. You plan to stay for,

10:37say, five, seven, maybe 10 years.

10:39And over that time, the market hopefully

10:41rises enough to cover those high initial

10:43reno costs.

10:44Exactly. Market growth becomes your

10:46friend.

10:46Time smooths out the bumps.

10:48Okay. Path one, renovate for lifestyle.

10:51Stay longterm. What’s path two?

10:53Path two, short-term flipping. This is

10:56much harder now, but still possible if

10:58you tick specific boxes,

11:00which are

11:00two crucial things. One, you must buy

11:02the property well below market value.

11:05Often offmarket deals are the only way.

11:07You need built-in equity from day one.

11:09Okay, buy cheap. What’s number two? You

11:11need the skills to do most the work

11:12yourself or have very cheap, reliable

11:15access to trades. You have to minimize

11:17those labor costs

11:18and focus the work where

11:19high impact cosmetics, things that

11:21appeal to the widest range of buyers.

11:23Keep it neutral, keep it clean, avoid

11:26anything too personal or out there that

11:28might put people off,

11:29right? And for anyone attempting either

11:31path, especially a bigger project, that

11:34fear of over capitalizing is real. any

11:37safety nets.

11:39The simplest one, get evaluation before

11:41you start. Talk to a professional

11:43valuer. Ask them, “If I do exactly this

11:46work, what will this property likely be

11:49worth at the end?”

11:50Do the sums up front.

11:51Do the sums up front. Don’t rely on

11:53guesswork or hope halfway through when

11:55the bills are piling up.

11:56Makes sense. And despite the cost, we

11:58keep coming back to it. Kitchens and

12:00bathrooms,

12:01they just are. They’re the money zones.

12:03Yes, they’re expensive to do well, but

12:05buyers notice them, search, and they

12:06hate the idea of having to redo them

12:08immediately after moving in.

12:09So, updated kitchens and bathrooms and

12:11adding extra ones were possible. Like in

12:13Glenn Haven, that’s still the key to

12:15unlocking value.

12:16It really signals a move-inready home,

12:18removing a major headache for the buyer.

12:20That hassle-free experience is what

12:22they’ll pay for.

12:23What a fascinating deep dive. Costs,

12:26risks, strategies all across the

12:28country. It’s clear the market has

12:30shifted. Renovated homes definitely get

12:32a premium.

12:33Yep.

12:33But actually making a profit from the

12:35renovation itself much tougher now

12:37because of those construction costs

12:39unless you’re a skilled DIYer or you’re

12:42playing that high stakes game at the

12:44luxury end reconfiguring space like we

12:47saw.

12:47The risk has been priced into the

12:48finished product. Now you could say

12:50so that leads us to our final thought

12:52for you to ponder. Given today’s market

12:55where turnkey homes command such a high

12:57price, what’s actually the bigger risk

13:00for the average homeowner? Is it over

13:02capitalizing on a big renovation you try

13:04to manage yourself with all the

13:06potential cost blowouts and stress?

13:08Or is it paying that significant premium

13:10for a finished home knowing that someone

13:12else has already absorbed all that risk,

13:14time, and hidden cost for you?

13:15Which risk feels greater to you right

13:17now? Something to think about. We’ll

13:19catch you on the next deep dive.