The recent television show The Block NZ showed that two houses in the same location, of similar size and with the same reserve price, can sell for $217,000 difference in value. It begs the question, how do you add the most value to a home, and what value do high specifications add in today’s property market?
All the houses on the Block NZ were situated in the central Auckland suburb of Point Chevalier and they all had a reserve price of $1.325 million.
House A, on a front 355sqm section with a floor area of 198.4sqm and sold for $1.552 million. House B, also on a front section of 357sqm and had the same sized floor area as House A, but sold for $1.472 million.
House C had a larger 477sqm rear section but a slightly smaller floor area of 188.7sqm and sold for $1.386 million. While House D was also on a larger 480sqm rear section with a floor area of 191sqm and sold for $1.335 million.
The results of the show indicate that it may be worth spending more on “high spec” features for homes at the high end of the market, but for more modest priced homes you have to be careful not to over-capitalise, or overspend on improvements that won’t increase the value of your home.
So when you are looking to add value it’s helpful to know where to get the best bang for your buck?
James Steele – Valuer QVhomevalue Auckland.
In terms of the “high spec” nature of houses on The Block, do you think houses sold for higher prices due to “high spec” additions?
Whether or not “high specification” adds value differs between suburbs and value ranges because of the demographics of an area. Different buyers value different things.
In terms of the results of The Block, I don’t think the actual value of upgrades directly represents added value, you have to look at the overall house on offer. Especially when comparing the front and back houses where I think the basics of land size, sun and layout etc were the biggest factor.
Bruce Wiggins – Registered Valuer QVhomevalue Auckland
If you put in a $30,000 bathroom or kitchen, will it add the same amount of value to your home as you spend, or more/or less?
It depends on the home and the neighbourhood. The kitchen and bathroom are a good place to spend money but you can overdo it.
Spending money on kitchens and bathrooms will usually add value to a home. But if you want to know whether to spend $10,000 or $30,000 on your bathroom makeover you need to consider the overall value and location of your home. On a higher priced property you are likely to add at least the value of a ‘high spec’ bathroom but at the lower end then you might be better to spend $10,000 instead. A modern kitchen that doesn’t break the bank will still add value to a home. But if you spend $40,000 on a kitchen in a modest home, you may not get the same value back.
How much value does landscaping add to your home?
The value it adds could range from nothing to a lot depending on the site, location and quality of the landscaping. There is no set amount you should spend on landscaping, just keep it in line with the neighbourhood.
How much does value does a new fence add?
Not much if anything, except road front rock walls which can be expensive. I expect a property to be fenced. Costs can be shared with a neighbour under the Fencing Act if it’s on a boundary. You should always keep in line with the neighbourhood. The quality of a fence does matter, but whether you spend a little or a lot it’s unlikely you’ll see an equal improvement in value.
If you insulate your home and heat pump/s to the value of $5000, how will the value be affected?
Insulation and heat pumps are expected today. If your home does not have insulation or heating it may detract from the value so this is a good investment and will usually add some value.
If you add solar panels and a solar heating system to your home worth $30,000 how much value will this add to your home?
This is difficult to quantify because cost and value are not the same. You also need to consider what benefits the solar power brings and whether these benefits will be returned over a long or short period.
How much value would a wardrobe system add to your home?
This could be considered a chattel, so not much added value.
How much does value does a new garage add to your home?
How much value is added always depends on the property itself. I wouldn’t advise spending a lot of money in lower value suburbs.
If you put in new carpets worth $12,000 to your home, will it add $12k in value, or more or less?
Because carpets are a chattel, generally they won’t add value.
Will a new roof add value to your home?
No because roofs fall under repairs and maintenance. I expect the roof on a house to be functional and do its job. You will lose money if leaks otherwise it is just a cost. You wouldn’t do it unless it’s needed. As long as the roof of the dwelling is well maintained, functional and in reasonable condition, you will not add huge value by putting on a new roof. But if the roof is leaking and does need replacing then this will detract from the value of a home quite substantially so it is worth renewing your roof if it needs replacing.
What is the best bang for buck in terms of money spent and value added to your home?
Still kitchen and bathroom but you always have to keep in mind the home and property, and the location.
James Wilson – Valuer QVhomevalue Auckland
How much value does landscaping add to your home?
Tidy and well presented landscaping can add a significant amount of value a property. However it may not be a direct relationship between value spent and value added. The added value of well-presented landscaping is generally on the overall saleability of a home through increased street appeal/utility. It is a great way to get potential purchasers through your home on open homes.
In regards to how much should be spent on landscaping, it really depends on the overall value level and type of property. The market expectation of the level of landscaping in a high value suburb is significantly greater than that of a lower value suburb.
The nature of the property can also dictate the nature of the landscaping and site development utilised. For example if you own a high end character villa you ideally want to keep that timber picket fence out front rather than replace it with something more modern.
Property owners should consider the nature of their property and the wider neighbourhood before commencing any major landscaping works.
Another example of this could be replacing timber joinery in a villa/character bungalow with modern aluminium joinery as this does not enhance the character and detracts from the value.
Does new carpet and a new roof add the same amount of value as they cost to install?
These are generally considered as on-going maintenance costs. From a valuation point of view the focus is more along the lines of what would it cost to rectify any issues caused by not maintaining items of this nature rather than the value that they may add to your property.
Does a garage add value?
The added value of garaging is also very dependent on the locality of the property. In areas which have larger land sites and generally more space, a new garage may not add much in value. However, in inner city suburbs where land is at a premium and the lots are much smaller and off street parking is scarce, a garage could add a significant amount of value to your property.
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