4 options for home owners as mean property price reaches over a $1million
The Australian Bureau of Statistics’ latest figures show the mean price of residential dwellings in NSW ($1,245,900) remains the highest in the country, followed by QLD ($944,700) and the ACT ($941,300).
For Australia as a whole, key statistics in the report show:
- The total value of residential dwellings in Australia rose by $130.7 billion to $11,366.4 billion this quarter.
- The number of residential dwellings rose by 53,400 to 11,338,500 this quarter.
- The mean price of residential dwellings rose by $6,900 to $1,002,500 this quarter.
With house prices continuing to rise, home owners may well be wondering what, if anything they should do.
Here are four options to consider:
1. Sell to capitalise on high prices
If you’re a homeowner and you’ve owned your property for many years, you might be sitting on substantial capital gains. Yes, there may be more gains to be had later tomorrow, but there again prices may be going down by then.
To capitalise on this profit homeowners may consider:
- Downsizing to smaller, less expensive property
- Buy land and build your own home (if you fancy moving out of town, we have two large blocks left at Heartwood Estate – Lot/1002 Heartwood Drive is just $450,000 and Lot/1007 Crows Ash Avenue is $485,000)
- Buy a property in a less expensive location
2. Renovate to increase value
Fancy that kitchen you’ve always dreamed of, or knocking a wall through and extending the living space? It may be possible to release some capital to improve the property.
Alternatively, if the property is suitable, and planning allows, it may be possible to build a granny flat; you can then either use as a guest room, a home office or creative studio, or rent out and get an income from it!
The main questions to ask yourself when considering a renovation are:
- What is the cost of releasing the capital in terms of ongoing payments?
- Will the renovation add value to the property in the long run?
- If building a granny flat to rent out, how much rental return should I expect and how will this affect my tax? Come and speak to us if you want to find out more!
3. Leverage equity to invest
Depending on where you are with your mortgage, the equity in the house can be used to finance additional investments.
While it does potentially expose you to more debt, an investment property will also earn you money – and hopefully capital gains in the future.
If you are considering this, we strongly advise speaking to a financial specialist so you can fully understand what the tax implications are for your situation, and what your budget is. Then come and speak to us to see how our property management services can help make your life easier as a landlord.
4. Do nothing – but potentially build equity
If you’re happy where you are, and you’re enjoying life, why sell?
The chances are your property will continue to gain value over time, so you can consider options when you’re ready to.
However, with interest rates lowering, now might be the time to review your mortgage provider and see if you can get a better deal.
If you would just like to know what your house could get in today’s market, use our free online appraisal tool.
If you’re thinking of selling your property, or even just want an obligation free appraisal, come and talk to us. We are one of Newcastle’s longest established real estate offices and our innovative team is constantly achieving great results for our clients.
Having been in the business for nearly 50 years, we know what the current trends are and can also give you some hints and tips which may make the property more attractive to potential buyers.
Drop into the Cardiff office or give us a call on 02 4954 8833. Or send us an email to: mail@apnewcastle.com.au – we’d love to help you.
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