BUYING BRAND NEW IS TOO EXPENSIVE — HERE’S WHY PERTH HOMEOWNERS ARE RENOVATING
- Mounts Bay Constructions
- Nov 11
- 7 min read
Updated: Nov 18
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In Perth's current market, where the median house price sits at $820,000, moving house isn't just expensive—it's often financially irrational. When you factor in the true cost of selling and buying, that dream of a "better" home starts looking more like a wealth transfer to agents and the government than an investment in your lifestyle.
Here's what most people miss: the same $60,000 to $70,000 you'd lose to transaction costs could completely transform your existing home. Not with superficial updates, but with genuine, design-led renovation that creates the space, light, and liveability you're actually seeking.
The question isn't whether you can afford to renovate. It's whether you can afford not to.
THE HIDDEN TAX ON MOVING HOUSE
Let's start with what nobody talks about at dinner parties—the dead money. When you sell your Perth home and buy another, you're immediately down serious capital before you've even improved your lifestyle. Agent commissions in WA typically run 2.2% to 2.5% of your sale price. Add transfer duty on your new purchase, plus legal fees, removalists, and the inevitable "while we're at it" costs, and you're looking at a substantial sum that adds zero value to your daily life.
Then there's the invisible costs—the three months of double mortgage payments while you settle, the storage fees, the weekends lost to house hunting, the stress of competing in multiple offers. These rarely make it into the spreadsheet, but they're real nonetheless.
Real Numbers: The $820,000 Reality Check
Cost Component | Selling $820k Home | Buying $1.1M Home | Total "Dead Money" |
Agent Commission (2.4%) | $19,680 | - | $19,680 |
Transfer Duty | - | $42,765 | $42,765 |
Legal & Moving Costs | $3,000 | $3,000 | $6,000 |
Total Transaction Costs | $22,680 | $45,765 | $68,445 |
That's $68,445 gone—before you've gained a single square metre or improved one aspect of your living experience. And this assumes everything goes smoothly. Add a failed building inspection, a gazumping, or a delayed settlement, and watch those numbers climb.
THE RENOVATION ALTERNATIVE: WHERE EVERY DOLLAR WORKS
Now consider what $250,000 in renovation could achieve on your existing property. We're not talking about new tiles and a paint job. We're talking about re-imagining your home's potential through intelligent design that responds to Perth's climate and your lifestyle — and lets you truly customise your home to fit how you live every day.
Perth builders typically charge $2,300 to $4,750 per square metre for new builds. Quality renovations, depending on complexity, generally run $2,500 to $4,000 per square metre—often delivering superior finishes because you're not paying for the builder's margin on the entire structure.
But here's what the per-square-metre pricing doesn't tell you: renovation allows surgical precision. You're not paying to rebuild perfectly good bedrooms. You're investing exactly where it matters—that dysfunctional kitchen, the cramped living area, the bathroom from 1987. Every dollar targets a specific problem or opportunity.
Cost Per Square Metre: The Truth About Value
BEYOND SQUARE METRES: MANUFACTURING SPACE WITHOUT ADDING FOOTPRINT
Perth’s abundant sunshine and Mediterranean climate mean orientation matters enormously.
A north-facing living area with proper glazing transforms not just the light quality but the entire experience of your home.
Good design doesn't always need more square metres. It needs better square metres.
Consider what strategic design moves can achieve:
Opening sight lines: Removing one strategic wall might connect your kitchen to your garden, instantly doubling the perceived space without adding a single square metre. Suddenly, cooking dinner includes sunset views and ocean breezes.
Vertical expansion: Cathedral ceilings in key living areas create volume that makes 180 square metres feel like 250. Add clerestory windows, and you've captured Perth's brilliant light while maintaining privacy from neighbours.
Indoor-outdoor flow: Perth's climate begs for seamless transitions between inside and outside. Stackable doors to a well-designed alfresco area effectively add 40 square metres of living space for nine months of the year—space that doesn't appear on your rates notice.
Borrowed landscape: Strategic window placement can capture your neighbour's mature trees, the park across the street, or distant hills—bringing these views into your daily experience without owning or maintaining them.
A well-conceived renovation can make a 1970s brick home feel more spacious than a brand-new McMansion.
THE PERTH-SPECIFIC ADVANTAGE
Perth renovation offers unique advantages that don't exist in Sydney or Melbourne. Our single-storey suburbs mean second-floor additions rarely trigger overlooking issues. Our stable soil conditions mean fewer structural surprises. And our climate means outdoor rooms genuinely function as living space most of the year.
There's also the suburb-specific intelligence that comes from staying put. You already know which way the afternoon breeze comes, where the summer sun hits hardest, and when the neighbour's pool pump starts up.
This intimate knowledge allows you to customise your home’s design to real conditions — not theoretical ones.
THE LIFESTYLE PREMIUM YOU CAN'T BUY
Staying put and renovating delivers something no new purchase can match—continuity. Your kids keep their school. Your morning coffee spot stays the same. That neighbour who feeds your cat when you're away remains next door.
These aren't small things. They're the foundation of daily contentment. Your garden stays yours—those fruit trees you planted five years ago will actually be there when they mature. The quirky local shops you love remain walkable. Your commute doesn't change.
ABS data shows renovation spending remains remarkably stable even as new build approvals fluctuate wildly. People who’ve done the maths understand that improving what you have often beats starting over.
THREE SCENARIOS: WHICH MAKES FINANCIAL SENSE?
Let's model three real options for a family in Mount Lawley with an $820,000 home that needs updating:
Scenario | Upfront Cost | End Position | Lifestyle Gain | Financial Position |
A: Stay + Renovate | $250,000 | Same location, transformed home | Major improvement | Property value +$300-400k |
B: Sell + Buy Established | $68,445 + $280,000 gap | New $1.1M home needing work | Lateral move | Down $68k immediately |
C: Knockdown + Rebuild | $50k demo + $750k build | Brand new home | Complete change | 18-month disruption |
Scenario A wins on every metric that matters—financial efficiency, lifestyle improvement, and timeline.
But let's examine what these scenarios actually mean in lived experience:
Scenario A means you're living in a progressively improving home, maintaining all your relationships and routines while your equity grows.
Scenario B means starting over—new neighbours, new routes to school, new everything—while immediately losing substantial capital and probably still needing to renovate because that $1.1 million home won't be perfect either.
Scenario C means 18 months of rental costs, storage fees, and the psychological weight of managing a major construction project while living elsewhere. Many relationships don't survive a knockdown rebuild. It's worth asking if your sanity will.
WHEN NEW BUILDS MAKE SENSE (AND WHEN THEY DON'T)
If your block has severe structural issues or you need to double your living space, then yes — consider demolishing or moving. But these situations are rarer than the building industry suggests. Most “problems” are design challenges with design solutions. That dark, compartmentalised 1970s layout? Often three walls away from being spectacular. Custom builds in Perth now run $750,000 to $1.6 million for a typical 325 m² home. Add demolition, site works, and variations, and you're looking at serious capital outlay with 12–18 months of disruption.
For half that investment, renovation can deliver 90 % of your wishlist with 10 % of the disruption — and the ability to customise your home for your lifestyle rather than settling for a cookie-cutter plan.
THE PSYCHOLOGY OF STARTING FRESH VS. EVOLVING
The fantasy of a fresh start is powerful — new house, new life — but the reality is that you bring yourself wherever you go. Renovation, paradoxically, can deliver more renewal than moving. You're choosing to improve your life rather than escaping it.
You're solving actual problems rather than hoping they disappear. There’s agency in renovation — you become the author of your transformation, not a passive consumer of someone else’s design.
THE DESIGN-FIRST APPROACH: KNOW BEFORE YOU GO
The smartest money in Perth is taking a different approach — design first, decide second. Before committing to selling, moving, or demolishing, homeowners are investing in proper design consultation to understand what’s possible with their existing home.
A skilled designer sees possibilities where you see problems. That awful 1980s addition? It might be blocking your best light. Remove it and your home breathes again.
These aren’t cosmetic changes — they’re spatial surgery that can completely alter how a home feels and functions.
THE BOTTOM LINE
Perth’s property market has created an unusual opportunity. The friction costs of moving have become so substantial that staying and improving often deliver better financial and lifestyle outcomes.
That $70,000 in transaction costs? It's a new kitchen and living area.
That $280,000 gap to buy something marginally better? It's a complete transformation of your existing home — designed specifically for how you actually live.
More importantly, renovation lets you customise your home to solve the real problems in your life, not the imagined ones.
A SMARTER WAY TO PHASE YOUR BUDGET
There's something else worth knowing. The most sophisticated renovators in Perth have discovered they don't need to wait years accumulating capital to begin their transformation. They're using HUMM Financing as a strategic lever to phase their renovation intelligently—kitchen and living this year, master suite next, alfresco the following season. It's elegant capital deployment: each completed stage adds value that supports the next phase, all while you're living in and enjoying the progressive transformation. No disruption to cash flow, no waiting for the "perfect moment" that never arrives. Just steady, strategic improvement that compounds over time.
READY TO RUN YOUR NUMBERS?
Before you call an agent or browse realestate.com.au, invest an hour in understanding what's possible with your current property. With Mounts Bay Constructions’ design-before-scope consultation, we examine your specific block, your suburb's characteristics, and your lifestyle needs to model the renovation-versus-new-build ROI for your exact situation. No generic estimates. No pressure. Just clear, specific analysis of what makes financial and lifestyle sense for you.
Because in this market, the smartest move might be not moving at all — but choosing to customise your home into the one you’ve always wanted.
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