Flipping hell: homeowners abandon renovations amid surge in building costs By Aidan Devine
A raft of incomplete homes have been streaming onto the market for sale across Sydney after the owners’ decided not to finish their renovations. Here’s why
They were gutted and stripped to the beams before their new owners abandoned the renovations and relisted the homes for sale.
A raft of partially renovated properties have been streaming onto the market for sale across Sydney amid soaring labour costs and tradie and materials shortages.
It comes as housing experts reported that flipping houses – or renovating quickly for a profit – has become challenging due to Covid era disruptions to global supply chains.
Residential construction costs increased 7.3 per cent nationally over the past year, the fastest rise since 2005, CoreLogic’s Condell Construction Cost Index showed.
Demand for building materials and labour – supported by government grants, such as the HomeBuilder program that expired last year – has also been high.
CoreLogic research director Tim Lawless said the rising costs and a longer wait for materials meant delayed projects or renovations running well over budget.
Faced with this prospect, and the high mortgage holding costs for those who bought during the recent property boom, many renovators appeared to have cut their losses rather than finish the work.
Among the partially completed homes is a property in South Granville that went under the hammer Saturday.
The six-bedroom house on Blaxcell St was stripped to a shell, according to selling agent Omar Saadi of Pace Property, and sold for $910,000.
The owners were reported to have abandoned the renovations after realising their project would no longer be financially feasible for them.
Most of the prospective buyers bidding at the auction were owner occupiers, rather than investors flipping for a profit, Mr Saadi said.
TV renovation queen Cherie Barber said most renovators went into projects with unrealistic expectations at the best of times and were getting “blindsided” in the current environment.
“There is a lot of frustration,” she said. “It’s normal for projects to take much longer than people think, especially those who have been encouraged by reality shows like The Block, which are not accurate.
“Right now a lot of people are struggling to even get basic materials and tradies are picking and choosing jobs. With some tradies, they’re charging three times what they usually do.”
She said she experienced this personally when she started a renovation project in Mulgoa but had to put it on hold nine months to wait for materials and labour.
In the inner west suburb of Leichhardt, a corner block is up for sale after partial building works were undertaken. The agent said the interior is little more than a concrete slab.
A site in nearby Lilyfield is for sale comprising only the partly built renovations of three mixed-use buildings.
Other partially renovated properties were recently up for sale in the Hunter Valley, Port Macquarie and the south coast.
Selling mid-project was often a less stressful option for renovators feeling overwhelmed by the process, Ms Barber said.
“When they’re quoted three times the price of last year, the easier option is just to give up and get their weekends back.”
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