So-called ‘reality’ home renovation television shows don’t reflect the true state of the housing market, and dupe viewers into thinking renovation costs are more affordable than they are.
Patrick Bright, EPS property search director, said reality home improvement programs such as the latest series of Nine’s The Block and Ten’s current series of The Renovators, give viewers a false perception of the costs involved in property development and renovation.
Bright said his property search office had experienced a dramatic increase in queries relating to purchasing, selling and renovation projects. He added that many people were unaware of the less obvious, and less discussed costs involved in renovating property, such as finance costs, holding costs and council fees.
“Whilst they are great entertainment, the biggest downfall from [renovation] programs is that they don’t reveal to viewers the real cost of labour to make these improvements as well as the total costs associated with buying and selling real estate like stamp duty, legal’s, marketing and selling agents costs,” Bright said.
Indeed some of the lessor known costs involved in ‘buy, renovate and sell’ projects can be significant expenses, and people should be well aware of these costs before embarking on any home project.
New figures released by the Housing Industry of Australia showed that nationally, the total renovation investment surged in the first half of 2011, and is expected to reach record levels over the next two years.
Bright said the reality renovation programs were based solely on a buy, renovate and sell formula despite the fact that in the majority of cases the financial benefits of holding onto a renovated property far outweighed the negatives.
“The concept of buying, renovating and selling property as soon as the paint is dry can be profitable if executed correctly however for most people is almost a guaranteed way to make a loss,” Bright added.
The renovation expert warned that most would-be renovators who try to copy the formula seen on TV hoping to make a quick profit will end up bitterly disappointed and end up losing money.
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