Over the last 24 months South Africa and many parts of the world have experienced a property boom driven largely by the pandemic and lockdowns that have forced people to spend more time indoors. The impact of this has meant more people have had to reflect of the utility value of their homes to ensure its more suitable to accommodate their work and leisure needs.
A lead indicator in this trend has been the 20% year on year increase in the sales of home maintenance retailers such as builder’s warehouse and DIY outlets in South Africa. This is evidence of South Africa’s making key adjustments to their living conditions, which is an important part of preserving and increasing the value of your property.
The growth in property prices can be expressed in two ways, nominal and real house price growth. Nominal price growth is driven by inflation and is not linked to real value drivers such as supply, demand and economic utility. In contrast, real house price is adjusted for inflation, which simply means to minus the impact of inflation to get the real growth rate of property, this growth is driven by economic factors such as demand and usefulness of the property.
The questions of how to increase the value of your property starts with understanding these two concepts and then applying the following advice to ensure your property has the best chance of achieving real price growth.
Firstly, it is important to accept that maintenance of your home is a constant investment that has to be made in order to ensure your property keeps up with trends and gives you continuous utility value. By not spending the money to keep your property well maintained, it ultimately will cost you more to make full replacements in the long-term.
Once you have decided on a maintenance budget, the next step is to plan on how to approach maintaining your home. It could be a decision on whether to repair items of a wear and tear nature or looking at future trends to improve the relevance of the home, such as replacing an electric geyser with a solar geyser or installing energy efficient lights. Having a set plan will help you to decide on how to allocate funds to get the best improvement on the home.
One key improvement that is always bound to yield a return is to keep the kitchen area in good shape as it is the most frequently utilized used part of the house. Further to this, it is often the part of the house that potential buyers use to gauge how much to negotiate on the selling price, therefore you want to be on the right side of having bargaining power by keeping your kitchen in a modern and quality condition.
Not all maintenance adds value to the house and the wrong improvements could negatively impact the value of your home. For example, converting a spare room into a steam room ultimately means converting it into a single-purpose area thereby limiting its use. A potential buyer may be dissuaded by the idea of having to make large changes in order to use the room for any other purposes. Wherever possible, homeowners should keep things classic and standard making the home as unrestrictive as possible to increase its resale value.
To find out more about how to keep your property in the best shape, how to pay-off your bond early and leverage your existing access bond to make improvement to your property, MortgageMarket.co.za will be able to assist you with advise on how to make the right decisions.
