Thinking of moving or upgrading? Here’s what experts recommend
Homeowners should also consider the cost of temporary accommodation during extensive renovations.
For South African homeowners caught between staying put or starting fresh, the decision to renovate or relocate is more than just personal preference; it’s a question of smart investment.
According to property experts at REMAX Southern Africa, the answer lies in understanding which option offers a better return on investment (ROI) and holds the most potential for future house price appreciation.
“The choice between renovating and relocating hinges on a homeowner’s financial goals, the state of their current property, and market conditions in both the current and potential new neighbourhoods,” says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.
For example, he explains that in an area with slow house price appreciation, selling and upgrading could yield a better price than investing in a stagnant area.
In high-demand suburbs with little stock, he recommends that homeowners upgrade their current home to ride the property value wave.
Another aspect to consider when weighing up whether to renovate or relocate is the transactional costs of buying a home, such as transfer duties, legal fees, and commissions. These can typically total around 7 to 10% of the purchase price.
“These costs can offset short-term gains unless the buyer is upgrading to a home with greater long-term value potential,” Goslett cautions.
Home renovations can be a strategic move, especially in an area with stable or rising property values. Updates to kitchens, bathrooms, and open-plan living spaces can significantly increase the appeal and value of a home.
However, Goslett warns against overcapitalising – spending more than the area’s resale values can support. Spending more than the neighbourhood can support in resale value may mean losses down the line.
“Homeowners should also consider the cost of temporary accommodation during extensive renovations and the unpredictability of construction timelines, which may erode ROI if not carefully managed,” he notes.
Beyond financial returns, homeowners must consider how well their current property supports their day-to-day life, and whether they can afford to buy a new home if they wish to remain in the same suburb (perhaps because of schooling, work commutes, or family).
When a home’s footprint cannot accommodate the household’s evolving needs, Goslett says relocating may be the more practical and cost-effective solution.
Similarly, if homeowners must remain in their current location, then renovating may be the best solution.
