Why hire an architect?
Approaching any renovations whether it’s alterations and additions to your existing home or a completely new build can be daunting, especially when this is something that you have not done before. The approval process is often lengthy and can be difficult with numerous consultants required.
Approaching any renovations whether it’s alterations and additions to your existing home or a completely new build can be daunting, especially when this is something that you have not done before. The approval process is often lengthy and can be difficult with numerous consultants required. Assistance in preparing a set of drawings and collating all the documentation to be submitted to council is often required. The question whether you require an architect is a valid question at the beginning of a project.
The analysis of the pros and cons of hiring an architect has been analysed in detail by ThoughtCo:
https://www.thoughtco.com/do-i-need-to-hire-architect-177592
Virtual Reality + Life Size Plans.
Building or renovating your family home is a big investment. It is a project that you want to get right and be comfortable with when the initial plans are submitted for approval to prevent alterations down the track and additional costs.
The process can be quite lengthy throughout the approval process and a design that takes into consideration the surrounding environment from the beginning can save many headaches later on.
Building or renovating your family home is a big investment. It is a project that you want to get right and be comfortable with when the initial plans are submitted for approval to prevent alterations down the track and additional costs. The process can be quite lengthy throughout the approval process and a design that takes into consideration the surrounding environment from the beginning can save many headaches later on.
Engaging a professional to help design your dream home should mean that you end up with exactly what you hoped for. However, it is often difficult for architectural plans in 2d to be read and understood as a 3d home and picture how this will be used by your family.
It is only when the keys are handed over for you to enter your new home that you are able to see the design. However, by this point it is too late to realise that a window is in the wrong spot to catch the morning light coming in your bedroom or the spacious bathroom you thought you were getting is much too small.
Technology is moving at a rapid rate and 3d modelling software allows for architects and building designers to create renders and digital models which help to give an indication of what you will be receiving at the end of the project.
There are other options out there that can provide even more clarity on your future home. A company called ‘Lifesize Plans’ http://www.lifesizeplans.com/ opened in 2016 and based in a warehouse in Auburn, Sydney opened to aid new renovators that have difficulty reading 2d plans. The simple concept is you are able to bring in 2d plans that are projected at a 1:1 scale on the floor of the warehouse, allowing you to walk through your house before the plans are even submitted to council. They even have typical furniture items and walls that can be moved around the space so you can get a good feel for the size of the spaces. This simple method of converting plans into reality can save major building costs further into the project.
Virtual reality is also another area that is taking off rapidly in the construction industry. Many ‘off the plan’ apartments are now sold with the ability for buyers to virtually walk through their future apartment, see the exact views they will be receiving on the level they have selected their apartment on from the drone footage recorded at that height. Whilst this is now a common method for developers to use to sell larger scale developments, it is becoming a more accessible piece of technology as time goes by. Although this option is slightly more costly than a 3d model or ‘lifesize plans’, it could create piece of mind being able to virtually walk through your future house and know exactly what you are buying from the initial stages of the project.
To renovate or buy - doing the numbers.
At Palm Studio we have worked with many young families that have started running out of space as they have new little family members they start needing to squeeze into the existing home.
The question always comes up, should we renovate to give ourselves that extra space or do we buy something a bit bigger?
At Palm Studio we have worked with many young families that have started running out of space as they have new little family members they start needing to squeeze into the existing home.
The question always comes up, should we renovate to give ourselves that extra space or do we buy something a bit bigger? At Palm Studio in this blog we have done some numbers to help with this big decision. We are more than happy to sit down and talk you through approximate costings etc to tailor it to your situation if you contact us here.
With the median Sydney house price surpassing $1.2 million, the costs of moving relative to renovating has skyrocketed. This is because the bulk of the transaction costs associated with moving are priced as a percentage of the overall cost of the property which has boomed vs the costs of construction associated with renovating have increased more or less with inflation. The chart below highlights this changing dynamic:
Source: ABS
So in terms of numbers, when moving you will (very approximately) incur the following assuming you are transacting on a $1.2m property:
Stamp Duty – In NSW, if you purchase a property over $1mio, you currently pay $40,490 + 5.5% of every dollar you pay over the million dollar mark. As such, on the new property you purchase for 1.2 million, you will write a cheque to the Office of State Revenue of $51,490 for the privilege of their stamp on the transaction documents.
Because stamp duty is calculated as a percentage of the house value this cost has increased step for step with housing values which have been booming over the last 5 years. In addition as stamp duty is a tiered system (like income tax) whereby you pay a higher percentage as the value goes higher, you pay a much higher percentage of the housing transaction than in the past. For example in 2013, the median Sydney property was $655,250 and as such stamp duty was $24,965 – 3.80% of the house price. Today on this 1.2 million dollar property you pay 4.30% of the house price in stamp duty AND house prices have increased 83% over the 5 years.
Therefore this means that stamp duty costs when transacting on a median priced house have increased 106% over this 5 year period against a backdrop where construction costs have increased by just 13%.
Agent Fees – These work exactly the same as stamp duty where they are priced as a percentage of the value of the property. In NSW typically agent fees are circa 2.5% of the value of the property. Therefore you can expect to pay circa $30,000 to your friendly Mercedes driving real estate agent for selling your property. 5 years ago, this cheque was closer to $16,000 and as such this fee has gone up 88% versus construction prices going up 13%.
Other Fees – When selling and rebuying, you also incur legal fees on both sides of the transaction (~$4,000), bank fees to change the mortgage (~$1,000) and also moving fees (~$1,000).
So in total, to sell a $1.2 million dollar home and buy another one for exactly the same price, you are paying upwards of $87,000 in just fees, charges and taxes.
There are also the implicit costs involved with moving that you can’t put a dollar value on. Some of these may include the relationship with the current neighbours, the schools close by, the local cafes and parks and also the stress involved with searching for a new property, selling your old and moving your life. Invariably if you are selling to get more space for exactly the same price of your existing property for, you typically have to give up some of these current aspects which you may love.
So what if you decide to stay put and enlist Palm Studio’s help to renovate and extend your existing home? You will have a partner who collaborates with you in the design, and ultimately we can create a tailored space which revolves around YOUR ideas, needs and family situation.
Typically Palm Studio has found that the cost to renovate and add a new story with a bedroom, bathroom and living room is around the $250,000 to $350,000 mark. This investment not only adds to the value of your home but is able to be completely customised around your family’s needs so you don’t need to compromise when buying a new established home. The $87,000 which disappears and lines the pockets of real estate agents, NSW government and lawyers when buying and selling an equally priced house can be invested into your dream home.
The chart below highlights the trend of more people moving towards renovating and extending occurred since the start of 2014. This is when house prices took off and hence transaction costs of moving skyrocketing with them.
Source: ABS
Palm Studio’s fee structure is set up in stages whereby in Stage 1 we undertake preliminary design. At this stage, we listen to you and your family on design aspirations and budget. We then go away and design and draw cutting edge solutions that are not only elegant, but both functional and cost effective. Once we decide on the alternative which best suits your needs, we can provide an approximate costing of the total works.
This small investment to work with Palm Studio, to get an appreciation of the achievable design and the costs associated could save you the $87,000 in fees that disappear with moving – money which can be invested in you and your family. Palm Studio’s fee for Stage 1 is typically around $2,500 but we can give an exact quote when you contact us here.
There is absolutely no commitment to go further from here if you decide that buying is the best option for your family, but definitely worth spending this relatively small amount of money to consider investing in an architecturally designed renovation and extension 100% tailored to your family.