Hello,
As there is only limited stock of old houses [say pre 1950’s] and we are building houses at a fast pace. Do forum goers think there will be in increase in demand for older, renovated houses in the future? As supply remains the same and demand slowly increases, do you think we will see a increase in prices for older houses because of this? or are average joe jsut interested in new homes?
what do people think about this?
Avranjes
It is the land value that will become more valuable.
As land becomes more scarce people will buy both old and new houses, what I have noticed in the area that I have just bought a new IP, they are pulling down the old houses and utlizing the land to the fullest by placing either big houses or developing the land with duplex/units.
Others are renovating old houses to include new finishes.
Cheers
Jenny1
In general land appreciates and building depreciate. I think (also in general) people want houses that are nice to live in. This usually means new houses but an old house with character and charm that has been renovated so it is not smelly or impractical is just as good as a new house.
All things being equal the same block of land with a new house on it will be more valuable than the same block of land with an old house on it. However, just try to find a block of land in the middle of Carlton without an old house already on it! Reno is done rather than demolish because the relative returns are much higher. One could spend $30k doing up an old house for a $100k profit or one could spend $200k demolishing and building a new house on the same land for $100k profit (figures are example only and in some cases the historic heritage carries intrinsic value). Investors prefer to spend the least to make the most so old houses get renovated rather than demolished.
Mind you, if I had the money I’d always demolish and build new for my PPOR as I know what I want and I know I’m not going to get it in an old house (or most new ones for that matter).
Surrey.
A general rule of thumb is that unless it has a special character, like a inner city terrace, older houses utilise too smaller % of available land.
PPl today simple want a larger living area than can be found in older houses.
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