Record low interest rates are encouraging more Western Australians to renovate their homes with the latest ABS figures showing that the value of building approvals for home renovations in the State during the first six months of this financial year topped $309 million or around $50 million every month.  

Home owners needed  to exercise caution when considering a home renovation during 2015.  Typically, home owners choose to renovation because they become emotionally attached to their property and decide to improve their home rather then move to different property that has what they require. 
 As a result, they risk over-capitalizing their home which is one of the most common mistakes in real estate.
 

Homeowners tend to fall in-love with their homes and as their lifestyle needs change, so they decide to undertake a home extension rather than upgrading to a new home.
 
The danger with home renovations is that the home owner can spend thousands of dollars improving their home only to find that when they sell their property, they cannot recover the money they spent.

This warning is very timely as it is expected that house prices in most parts of WA will remain fairly steady during 2015 and therefore there will be no significant capital growth to offset any major expenditures on home renovations. 

Home owners should consider the following tips before undertaking a home renovation: 

- Focus on the front of the home as this will improve the street appeal of the property. If the existing home has dark brown bricks and old guttering then consider rendering the bricks and replacing the guttering. Also, if you invest some money in better landscaping this in turn will also improve the street appeal of the property. 


- Inside the house you should focus on the bathroom and kitchen areas. Improvements in these areas traditionally deliver high returns when the property owner decides to sell. 


- For ideas to improve the kitchen and bathroom areas, consider visiting new home display centres. These display homes will have the latest trends in new home design. They can also provide ideas on how to internally finish a home such as the colour of paints on walls and floor coverings. 


- You should also concentrate on the outside living area of the property as much as the inside of the property. The reason being one of the biggest trends in the Western Australia real estate market currently is a growing demand by home buyers for usable outdoor living areas. It is an important new trend which is highlighted by the large number of project home builders in Western Australia who are now promoting alfresco areas as part of the new home package. 


- Any renovation in this outside area should be fully integrated with the family and kitchen areas. This is because people want to move easily between their internal and external living areas especially during the summer months. 


- It is important to ensure that you get local government approval for any major renovations to your home such as building an alfresco area or new external walls. 


- If you are employing a builder to undertake your home renovations, check that they belong to a professional building organisation such as the Housing Industry Association of Western Australia. In addition, you can ask them to view recent work which they have undertaken in the local area. 


- Set a budget for your home renovations and carefully cost them. If you get a quote from a builder, make sure that it is in writing and there are no special conditions attached to the contract