Melbourne’s top renovation suburbs

Melbourne has maintained top spot as the most popular capital city for home renovations with strong activity continuing particularly in high-demand leafy inner suburbs.

ABS building approval data for the June quarter reported that the value of Melbourne home renovations and alterations increased sharply by 8.8 per cent over the quarter although this rise was influenced by seasonal factors.

Melbourne recorded renovation approvals to the value $545.2m over the June quarter well ahead of Sydney with $485.1m and Brisbane with $199.8m.

Albert Park was the top Melbourne suburb area for renovation approvals over the first six months of this year with $25.2m followed by Bentleigh – McKinnon with $24.4m, Toorak $23.0m, Malvern East $22.2m and Malvern – Glen Iris with renovation building approvals to the value of $22.1m.

Toorak however recorded the highest renovation spend per home of the top ten performers over the six months ending June ( based on the total number of residences per suburb area) at $4,188 per home closely followed by Albert Park at $3,886 per home.

Albert Park was the top performer based on the total suburb area with renovation approvals to the value of $5.39 per m2 closely followed by Toorak at $5.32 per m2.

Inner city and inner north suburbs are also becoming increasing popular for renovators with Richmond and Northcote making the top ten list but with median house prices at $1,220,00 and $1,300,00 respectively well below those recorded by the inner east and inner south suburban  renovation hot spots.

Strong renovation activity particularly in inner suburban areas reflects high land prices and steady building costs offsetting over- capitalisation concerns, together with strong attachment to established neighbourhoods, high transaction costs for relocation and low interest rates.

Increased renovation also reflects the growth of small-scale professional enterprises flipping properties for profit and taking advantage of high demand for modernised inner suburban homes and the prospect of continued solid capital growth in these areas.

Andrew Wilson is Domain Group Chief Economist Twitter@DocAndrewWilson join on LinkedIn and Facebook at MyHousingMarket