Demolish the old, rebuild new: a savvy option for value-driven Melbourne home hunters

Melbourne’s inner north west is the area’s epicentre for Italian restaurants and countless cafes, but savvy home hunters are discovering a new found attraction, buying ‘knock down’ properties and rebuilding amid the current market.

A local Melbourne G.J. Gardner Homes franchise has noticed an increase in interest for these types of builds, with customers attached to their location and looking for a financially smarter way to save time and money.

The lack of new housing supply and subsequent cost of land across major capital cities is driving the demand for ‘knock down rebuilds’. In fact, data released by the Australian Bureau of Statistics supports this buyer movement with building approvals for dwellings in Victoria rising by 3.2 per cent in March, a 3.5 per cent increase from 2023.

G.J. Gardner Homes Melbourne Inner North West franchise owners, Karyn and Mark Pemmelaar said ‘knock down rebuilds’ have become a top contender in the market, primarily because of the lack of new land and demand for the inner-city lifestyle.

“We predominately cater to the ‘knock down rebuild’ appetite and we’ve noticed this become more popular given this property type is readily available compared to new land in the inner metro areas,” Mrs Pemmelaar said.

“With the increase in cost of living pressures and mortgage repayments, we’ve seen an uptick of buyers who are also trying to find smarter ways of saving costs in their homeowner journey to secure their dream property,”

Land availability and the cost of buying a home are known challenges in the market but buyers in Melbourne are paying stamp duty valued at six months of take-home income for the average full-time worker in order to buy a median-priced home.

For properties valued at $130,001 to $960,000, Victorian buyers are required to pay $2,870 plus six per cent for every dollar over $130,000. Properties valued over $960,001 require buyers to pay 5.5 per cent of the property’s overall value in stamp duty.

“For many of our customers, the idea of paying stamp duty on an established property of higher value can add an extra layer of financial pressure, especially alongside the additional costs associated with buying a home,” Mrs Pemmelaar added.

“Buyers tend to see more value in spending money towards building new from the ground up and reaping the benefits of a home shaped around their needs.

“It’s also common for many to go down the path of renovating, only to exceed their budget and incur unexpected expenses. So, they end up exploring building a completely new home designed the way they want it in an area they know and love.”

Buyers looking to upgrade their home can choose from a wide range or customise a design built by G.J. Gardner Homes, personalised to suit the existing land.

Mrs Pemmelaar said families are also choosing to stay anchored to the lifestyle and community they have been in for some time, which is why ‘knock down rebuilds’ have become a desirable option.

“Many families have formed life-long friendships in their local area or have children attending local schools, so we’ve noticed community ties becoming more of a compelling reason to stay put,” she said.

“The inner-city lifestyle is also where we see continuously high interest from the market, particularly those who have been in the area for quite some time and grown to love their location which boasts a mix of amenities and convenience.”

Inner ring cities are becoming hot property for home hunters, with Melbourne now the fastest growing LGA in the country, recording a 10.6 per cent (177,396) increase in population between 2022-23.3

Mrs Pemmelaar said buyers looking to live in Melbourne’s inner north west, positions them to be in close proximity to the CBD, airport, cafes and shops, overall contributing to the consistent demand and interest for this area.

“Having a central location close to all the needs of a modern lifestyle, makes life easier with families in our area benefitting from well laid out public transport options, only 10km from the CBD, and access to generous parklands with walking and bicycle tracks,” Ms Pemmelaar said.

G.J. Gardner Homes Melbourne Inner North West franchise services Moonee Valley, Maribyrnong, Hobsons Bay, Brimbank and surrounding areas including Essendon, Sunshine North, Yarraville through to Williamstown.

For more information on ‘knock down rebuilds’, visit https://www.gjgardner.com.au/knock-down- rebuilds/