Second bathrooms add six-figure bonus to property sales

Second bathrooms add six-figure bonus to property sales

The Real Estate Institute of Victoria (REIV) have found that a second bathroom makes a six-figure difference in property sale prices. 

Victorian municipality, Stonnington, saw the greatest value added to sale prices of two-bathroom homes, making $312,000 more than homes with only one bathroom, with a median sale price of $920,000. 

Port Phillip also saw the greatest difference for three-bedroom houses with two bathrooms, achieving a median sale price of $1,830,000 – $252,500 more than one bathroom homes. 

In a statement released today, REIV President Joseph Walton said second bathrooms were highly sought after by buyers, particularly in premium bayside and inner city areas. 

“The number – and quality – of bathrooms is a key consideration for buyers, especially those with families. 

“Buyers are often willing to pay a premium for the convenience of two bathrooms, rather than purchase with the intent to renovate. 

“Buyer demand for multiple bathrooms is having a marked impact on price growth for most property types. 

“Investors are also realising the value of having a second bathroom when listing properties for lease, with these homes delivering solid rental returns. 

“Second bathrooms are popular with a wide range of prospective tenants, whether they be families or those moving into a shared situation. 

“Given homes with added amenities are highly desirable, many new properties are now being built to cater to the growing demand for two bathrooms,” said Mr Walton. 

Two-bedroom units – 1 versus 2 bathrooms

Municipality

1 bathroom median

2 bathroom median

Difference

Stonnington

$608,000

$920,000

$312,000

Hobsons Bay

$466,000

$650,000

$184,000

Melton

$239,500

$400,000

$160,500

Mornington
Peninsula

$415,255

$550,000

$134,745

Boroondara

$646,000

$775,000

$129,000

Port Phillip

$600,000

$725,000

$125,000

Melbourne

$541,000

$660,000

$119,000

Yarra

$636,000

$750,000

$114,000

Maribyrnong

$425,000

$531,500

$106,500

Bayside

$727,000

$824,000

$97,000

Maroondah

$475,000

$555,000

$80,000

Glen Eira

$580,000

$652,000

$72,000

Brimbank

$343,000

$413,000

$70,000

Moonee Valley

$490,000

$560,000

$70,000

Yarra Ranges

$412,000

$478,475

$66,475

Three-bedroom houses – 1 versus 2 bathrooms

Municipality

1 bathroom median price

2 bathroom median price

Difference

Port Phillip

$1,577,500

$1,830,000

$252,500

Stonnington

$1,687,000

$1,925,500

$238,500

Bayside

$1,378,000

$1,590,000

$212,000

Mornington
Peninsula

$508,000

$686,000

$178,000

Moonee Valley

$960,000

$1,135,000

$175,000

Hobsons Bay

$825,000

$962,500

$137,500

Melton

$310,000

$445,000

$135,000

Darebin

$886,500

$1,020,500

$134,000

Boroondara

$1,703,000

$1,825,000

$122,000

Melbourne

$1,340,000

$1,457,500

$117,500

Glen Eira

$1,293,000

$1,400,000

$107,000

Yarra Ranges

$531,000

$620,000

$89,000

Moreland

$830,500

$915,000

$84,500

Yarra

$1,421,000

$1,492,500

$71,500

Nillumbik

$682,550

$751,000

$68,450

Did you find this helpful? Why not share this news?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about home loans

How much are repayments on a $250K mortgage?

The exact repayment amount for a $250,000 mortgage will be determined by several factors including your deposit size, interest rate and the type of loan. It is best to use a mortgage calculator to determine your actual repayment size.

For example, the monthly repayments on a $250,000 loan with a 5 per cent interest rate over 30 years will be $1342. For a loan of $300,000 on the same rate and loan term, the monthly repayments will be $1610 and for a $500,000 loan, the monthly repayments will be $2684.

How does an offset account work?

An offset account functions as a transaction account that is linked to your home loan. The balance of this account is offset daily against the loan amount and reduces the amount of principal that you pay interest on.

By using an offset account it’s possible to reduce the length of your loan and the total amount of interest payed by thousands of dollars. 

Example: If you have a mortgage of $500,000 but holding an offset account with $50,000, you will only pay interest on $450,000 rather then $500,000.

What is a line of credit?

A line of credit, also known as a home equity loan, is a type of mortgage that allows you to borrow money using the equity in your property.

Equity is the value of your property, less any outstanding debt against it. For example, if you have a $500,000 property and a $300,000 mortgage against the property, then you have $200,000 equity. This is the portion of the property that you actually own.

This type of loan is a flexible mortgage that allows you to draw on funds when you need them, similar to a credit card.

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

Can I get a home loan if I am on an employment contract?

Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.

If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

Is there a limit to how many times I can refinance?

There is no set limit to how many times you are allowed to refinance. Some surveyed RateCity users have refinanced up to three times.

However, if you refinance several times in short succession, it could affect your credit score. Lenders assess your credit score when you apply for new loans, so if you end up with bad credit, you may not be able to refinance if and when you really need to.

Before refinancing multiple times, consider getting a copy of your credit report and ensure your credit history is in good shape for future refinances.

I have a poor credit rating. Am I still able to get a mortgage?

Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.

I can't pick a loan. Should I apply to multiple lenders?

Applying for home loans with multiple lenders at once can affect your credit history, as multiple loan applications in short succession can make you look like a risky borrower. Comparing home loans from different lenders, assessing their features and benefits, and making one application to a preferred lender may help to improve your chances of success

Will I be paying two mortgages at once when I refinance?

No, given the way the loan and title transfer works, you will not have to pay two mortgages at the one time. You will make your last monthly repayment on loan number one and then the following month you will start paying off loan number two.

If I don't like my new lender after I refinance, can I go back to my previous lender?

If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees. 

Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.

Can I refinance if I have other products bundled with my home loan?

If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.

What are the responsibilities of a mortgage broker?

Mortgage brokers act as the go-between for borrowers looking for a home loan and the lenders offering the loan. They offer personalised advice to help borrowers choose the right home loan for their needs.

In Australia, mortgage brokers are required by law to carry an Australian Credit License (ACL) if they offer credit assistance services. Which is the legal term for guidance regarding the different kinds of credit offered by lenders, including home loan mortgages. They may not need this license if they are working for an aggregator, for instance, as a franchisee. In both these situations, they need to comply with the regulations laid down by the Australian Securities and Investments Commission (ASIC).

These regulations, which are stipulated by Australian legislation, require mortgage brokers to comply with what are called “responsible lending” and “best interest” obligations. Responsible lending obligations mean brokers have to suggest “suitable” home loans. This means loans that you can easily qualify for,  actually meet your needs, and don’t prove unnecessarily challenging for you.

Starting 1 January 2021, mortgage brokers must comply with best interest obligations in addition to responsible lending obligations. These require mortgage brokers to act in the best interest of their customers and also requires them to prioritise their customers’ interests over their own. For instance, a mortgage broker may not recommend a lender who gives them a commission if that lender’s home loan offer does not benefit that particular customer.