Buyers deterred from doer-uppers because of sticky construction costs
Rising building costs are turning buyers off fixer-uppers, with new and recently renovated homes in high demand.
CONSTRUCTION costs are discouraging buyers from taking on renovation projects, according to CBRE’s latest Residential Valuer Insights report.
The Q2 2025 survey of CBRE’s residential valuers found rising demand for move-in-ready homes, including new builds and recently renovated properties.
Forty-two per cent of valuers reported increased demand for recently renovated properties and new houses, which was on par with Q2 2024.
At the same time, 45 per cent of valuers saw decreased demand for unrenovated homes, up from 41 per cent in the previous quarter.
Kat Hale, CBRE’s Residential Valuations National Director, said, “Although demand for recently renovated properties has risen since last quarter, we’re still seeing a relatively balanced market with most valuers reporting moderate demand in recent months.
“Looking ahead, valuers are optimistic with about half of those surveyed anticipating an increase in demand in the next 12 months accompanied by a boost in available stock.”
The data suggests a shift in buyer preference away from properties needing work, as cost pressures in the building industry make renovation less viable.
Australia’s property market continues to sit in a middle ground, with 61 per cent of CBRE valuers describing demand as ‘moderate’—up from 42 per cent a year ago.
Only 28 per cent of valuers reported ‘strong’ to ‘very strong’ demand, down significantly from 54 per cent this time last year.
First home buyers and upgraders remain the most active participants in the market.
According to the survey, Adelaide and the ACT had the highest level of first home buyer activity, while upgraders were most active in the ACT and on Queensland’s Gold and Sunshine Coasts.
Seventy-four per cent of valuers expect house values to rise over the next 12 months, a jump from 55 per cent last quarter.
Adelaide, Perth and Sydney Metro are tipped to see the strongest house price growth.
Almost half (48 per cent) of valuers also predict growth in apartment values, up from 35 per cent in the previous quarter.
Brisbane Metro, Perth and the Gold and Sunshine Coasts are expected to lead that charge.
CBRE’s Pacific Head of Research, Sameer Chopra, said, “Fundamentals for residential in Australia remain compelling but it might take three to four rate cuts to start boosting transaction volumes.”
“It’s worth highlighting that the gap between houses and apartment values could continue to persist and even grow.”
