What is upsizing in real estate? 

As we mentioned, in real estate, upsizing means upgrading to a larger home. You could also ‘upsize’ the home you live in, either through a renovation or by deciding to demolish and rebuild. 

Why upsize your house? 

There are a few different reasons to upsize your home. Sometimes, families are looking to move to a larger home as their family grows, or they need to take school catchment into consideration. Sometimes, it’s a case of wanting more land, or perhaps a swimming pool. Usually, it’s a case of needing more space; perhaps a family set-up has changed or you need to accommodate a business at home with more comprehensive home office facilities. 

There are a number of costs involved in upsizing to a bigger property, not just a larger mortgage. It’s important to be armed with the facts before you begin. 

What do you need to consider when upsizing your home?

When you begin to outgrow a home, it can be tempting to throw in the towel and decide it’s time to move. Before you do, it’s worth really assessing the floorplan to see whether renovating your home is an alternative way to upsize. 

Relocate or renovate

There are plenty of ways to upsize without moving, depending on your needs. You could choose an extension to your existing home or look at building a granny flat or tiny home in the garden. If you live in a single storey, you could add a second storey (providing you get planning permission). If your current home really is too small to meet your needs, but you like where you live, you could demolish it and rebuild a house more suited to you on your lot. 

Should you buy or sell first?

There are pros and cons to both options so it depends on personal preference, and how quickly the market is moving. Selling your home before you buy another is a safer choice if you intend to use the sales proceeds to buy your new home. 

Having a completed sale means you know exactly how much money you have to spend on your new property. You also have no worries about a sale falling through. Having a cash offer may also make you a desirable buyer.

The current market in Western Australia, with house prices rising, makes selling your existing property before you buy another more of an option.

If you sell your current home first, you may need to find temporary accommodation, which adds an additional layer of administration and potential anxiety. It might also take you longer than you imagine to find somewhere to buy. 

Buying first puts greater pressure on the intended sale of your home, unless you have additional cash to make up the shortfall should your purchase progress faster than your proposed sale. A bridging loan could be an option. 

Whether you choose to buy or sell first will depend on your personal circumstances and appetite for risk. 

What costs are involved with moving?

Most people are aware of the common costs involved in moving home. Agent fees, removalists, paying for an end of tenancy clean (if you’re moving out of a rental) and storage can easily add up to tens of thousands of dollars. But there are some larger costs to factor in too. 

Home loans

In addition to the chunky mortgage you may have to take out to upsize, your home loan will come with a selection of fees. You may be charged upfront fees, when you take out the loan - for the mortgage application, fees to register and service the mortgage as well as annual fees. There may also be exit fees when the loan comes to an end and Lenders Mortgage Insurance (LMI) to pay, depending on the size of your deposit. 

Stamp duty

How much stamp duty you will pay on a house depends on how much the house costs. There are special rates for first time buyers, but most homebuyers will pay general rates, which increase as the property price goes up. 

There are various online tools that allow you to calculate how much stamp duty you are liable for, but it also pays to consult a property tax expert who can tailor their advice to your individual circumstances. 

Legal fees

Upsizing involves several legal fees, including conveyancing fees to handle the legal aspects of your property purchase, as well as title search fees and mortgage registration fees. There will also be a transfer fee due to the government to transfer the title for your property into your name. 

Utility connection

The cost of transferring utilities will vary depending on your providers and where you are moving from to. But don’t forget you will have to pay both a connection and disconnection fee for each utility you move. 

Is it cheaper to buy or build a home in Australia? 

Whether it’s cheaper to buy or build a home in Australia varies on a case by case basis. The costs of both buying and selling depend on the location. 

Selling your house will be affected by the market conditions, as well as interest rates, and buyer demand. The state of the property market will also affect building a property. A hot market is likely to drive material and labour costs up. 

The main factor driving the costs will be you and your taste. The more high-end your fixtures and fittings the more your build will cost, just as the grander the type of property you want to buy is, the more expensive it is likely to be. 

Why upsize with Novus Homes

We’ve been in the business for over thirty years and know the Perth property market like the back of our hands. We are perfectly placed to talk you through the process of upsizing and which pathway is likely to suit you best. We have extensive experience in both renovation and demolish and build. 

Our team of experienced professionals can help guide you through the entire process, from design and construction to finishes and fixtures. Contact us now to find out more.