Many clients are torn between building a smaller, more sustainable home or a larger home with all the bells and whistles.
A general misconception people make about re-sale value is that a bigger house is better. This is the argument that real estate agent’s push so they can tick every possible box for potential buyers. But what is a large home really costing you?
Firstly there will be the inevitable trade off between quality and quantity. Many builders can provide you with a large home for a very competitive rate per square metre. But if the home is not designed to function or perform well then you may not be creating the resale value you are looking to achieve.
Clients often bring me their plans from builders that are inherently flawed and inefficiently designed. Rooms with a single purpose, oversized or poorly located spaces and acres of unusable circulation all contribute to an area blowout. Sure, the cost per square metre rate looks attractive, but it is not good value if the house is 25% larger than it should be and quality, functionality and building performance are lacking.
An investment in good design will always have better resale value, maintaining buyer appeal for years and standing out from the crowd of average homes in the market.
McMansion Hell - A look at a 370sqm home offered by a premium Perth builder
So why are large homes losing their appeal? Isn’t it the great Aussie dream to have a 2 car garage, 4 beds, 3 baths, a study, a theatre, scullery, parent’s retreat, teen’s retreat and an outdoor kitchen?
Well, household sizes are getting smaller and the population is getting older and want more manageable homes.
Its getting more and more expensive to operate a home with maintenance, power costs and cleaning.
Society is moving away material pursuits in favour of collecting experiences. A smaller, more cost effective home allows more of your time and resources to go on the things you enjoy doing such as hobbies and travel. The tiny house movement is growing globally based on this very philosophy.
People are becoming more educated about energy efficiency, building health and comfort. A smaller home may allow you to invest more in the quality of the building with higher levels of insulation, double glazing, high quality low maintenance materials, and features like ventilation systems that enhance your well being. Just as consumers are demanding safer, more fuel efficient and higher performance cars, they will expect the same of their homes.
And just like a new car, your new home starts to depreciate as soon as you build it.
In most cases it is only the land that appreciates in value. If you build a larger home, nobody wants to pay for extra space they don't need, but they will take it if it's included in the sale price!
An oversized house is like choosing a motor home as your daily driver. Yes it comes in handy for a few weeks a year (when the family visits), but it is unnecessary and expensive the rest of the time. A large but lesser quality home is the definition of overcapitalising. After all, who looks at a ten year old McMansion with envy!
When confronted by a quality vs quantity equation for your new house, focus on what you actually need and make the layout flexible for changing circumstances. Work on achieving the the best quality design and build you can afford. A small investment in an Architect will pay dividends in assisting to to weigh up all your competing desires and requirements and provide a workable solution for your new home. This home will bring pleasure and comfort everyday and will be more desirable when it is time to sell.