SA homeowners are spending billions on alterations
Category RealADVICE
With property prices in many areas currently rising faster than the rate of inflation, many owners are once again spending heavily on additions and alterations to make their existing homes more comfortable rather than moving elsewhere.
According to the latest available figures from StatsSA, the value of additions and alterations to residential properties shot up by more than 54% to a total of R6,6bn in the 10 months to end-October 2021, compared to the same period of 2020.
In addition, SA's main municipalities passed plans for 2,4-million sqm of future additions and alterations, worth a total of R18,7bn.
"This increase in home improvement activity is a natural development once owners detect a reasonable difference between the price they paid for a home and the current potential sale price," says Gerhard Kotze, MD of the RealNet estate agency group, "because this gives them room to spend some money on their homes without worrying that they will overcapitalise.
"Of course it also usually means that they can enjoy living in a bigger or better home without having to go to the trouble and expense of moving - and having extra space has become increasingly important due to the lifestyle changes brought about by Covid-19. For example, many people have become permanent remote workers and really need a proper home office now, while other families are adding more space for children to study at home, or for at-home entertaining."
But, he warns, there are several other important factors to be taken into account before owners finalise the "move or improve" decision - the most important being the fact that building costs keep going up (almost 7% in 2021) and that additions or alterations almost always end up costing more than initially expected. This needs to be weighed against the probable costs of selling the property and moving to a new home - preferably with the help of a reputable local estate agent who has this information at their fingertips.
"Also, the recent overall growth in prices notwithstanding, most areas will only support prices up to a certain ceiling. After that, potential buyers with more money will most likely be looking in areas where the average home price is higher. So if your home is already at the upper end of the price range for its area, it would probably be better to sell and move if you need more space - even if you do owe much less on the property now than you can get for it."
Kotzé says potential additions or alterations also need to be evaluated in terms of the age, size, and floorplan of the existing property. "You wouldn't install an expensive new sound system in a dilapidated car, for example, and it also does not make sense to spend a lot of money on extensive additions to an older home that is not in great condition."
Fourth, owners will need to make sure that any planned changes comply with municipal regulations, that they will match the style and décor of the original building and that they will make sense. "You don't want to end up with a five-bedroom house with just one bathroom, for example, or a home that has lovely, spacious living rooms but a horrible, cramped old kitchen."
Lastly, he says, owners should be aware of the serious inconvenience and discomfort of living in their home while additions or alterations are under way. "This can really only be offset by the thought of the eventual benefits, so if you decide to go ahead, you should also plan on keeping your home long enough to thoroughly enjoy them.
"In other words, additions and alterations will work best if you are well-settled, like your neighbours and the amenities your area has to offer, and intend to live in your home for many years to come."
Author: RealNet
