What Is the Most in-Demand Home Improvement in 2026 (Australia)?

Location, modern kitchens, and updated bathrooms are the biggest selling points of a house in Australia. These three factors consistently drive buyer decisions across all property markets. Many homeowners struggle to identify which upgrades actually attract buyers. They waste money on renovations that don't increase property value. Understanding buyer psychology helps you invest wisely. In this blog, we will explain what is the biggest selling point of a house (buyer psychology in AU) and how strategic renovations can maximise your return. How Australian Buyers Make Property Decisions Australian property buyers follow predictable psychological patterns. Research from the Real Estate Institute of Australia shows 83% of buyers form their opinion within the first 30 seconds of viewing. First impressions drive emotional responses before logical analysis begins. Buyers mentally calculate renovation costs when viewing properties. They discount their offers based on perceived work required. A dated bathroom can reduce offers by $15,000 to $40,000 according to CoreLogic property data. The "halo effect" influences buyer perception significantly. One standout feature creates positive bias toward the entire property. Conversely, one major flaw overshadows other positive attributes. Emotional triggers outweigh logical factors in initial decisions Buyers seek "move-in ready" properties to avoid renovation stress Visual presentation impacts perceived value more than actual condition Price anchoring occurs based on comparable renovated properties Location and Neighbourhood Appeal Location remains the unchangeable factor that buyers prioritise most. Domain research from 2024 confirms 76% of Australian buyers rank location as their primary consideration. Proximity to schools, transport, and amenities drives premium pricing. Neighbourhood demographics influence buyer psychology strongly. Families seek school catchment zones and parks. Young professionals prioritise café culture and public transport access. Street appeal creates immediate emotional responses. Tree-lined streets command 5-10% price premiums according to UNSW urban research. Corner blocks and quiet cul-de-sacs attract specific buyer segments. School catchment zones add measurable value to family homes Walking distance to train stations increases buyer interest Low-crime statistics influence family buyer decisions Future development plans affect long-term value perception Kitchen Quality and Modern Design Kitchens sell houses across every Australian market segment. Houzz Australia's 2024 Kitchen Trends Study found 80% of buyers consider the kitchen their most important room. Outdated kitchens create immediate buyer hesitation. Modern kitchen renovations deliver strong returns on investment. Archicentre Australia reports kitchen upgrades return 50-80% of costs at resale. Stone benchtops, quality appliances, and functional layouts attract premium offers. Open-plan kitchen designs appeal to contemporary Australian lifestyles. Buyers envision entertaining and family gatherings in these spaces. Island benches and butler's pantries signal quality to discerning purchasers. Stone benchtops signal quality and durability to buyers Integrated appliances create streamlined visual appeal Soft-close cabinetry indicates attention to detail Natural light in kitchens increases perceived space and value Bathroom Presentation and Renovation Impact Bathrooms rank second only to kitchens in buyer priority. REA Group data from 2024 shows 65% of buyers will reject properties with dated bathrooms. Mould, cracked tiles, and old fixtures trigger immediate negative responses. Strategic bathroom renovations deliver exceptional returns. A $20,000 bathroom renovation can add $30,000 to $50,000 in perceived value according to HIA housing data. Buyers pay premiums for move-in ready wet areas. Modern bathroom trends influence buyer expectations significantly. Frameless shower screens, floating vanities, and neutral tiles create spa-like appeal. Underfloor heating and quality tapware signal premium finishes. Frameless shower screens create modern, spacious impressions Neutral tile palettes appeal to broader buyer demographics Quality tapware indicates overall renovation standards Adequate storage solutions address practical buyer concerns Natural Light and Spatial Flow Natural light triggers positive emotional responses in property viewings. Swinburne University research confirms bright homes receive 15-20% more buyer interest than darker alternatives. North-facing living areas command premium pricing in Australian markets. Open floor plans create perceived spaciousness beyond actual square metres. Buyers mentally furnish open spaces more favourably. Defined zones within open layouts satisfy both aesthetic and functional needs. Window placement and size influence buyer perception dramatically. Floor-to-ceiling windows and skylights transform ordinary spaces. Strategic mirror placement amplifies natural light in darker areas. North-facing orientation maximises winter sun exposure Skylights add value in single-storey and townhouse properties Glass doors extend living spaces visually to outdoor areas Light wall colours amplify natural light throughout rooms Outdoor Living and Entertainment Spaces Australian buyers prioritise outdoor living more than any other nationality. Realestate.com.au research shows 72% of Australian buyers consider outdoor spaces essential. Covered entertaining areas extend usable living space year-round. Landscaped gardens create emotional connections with potential buyers. Low-maintenance gardens appeal to time-poor professionals. Established trees provide privacy and reduce cooling costs. Functional outdoor kitchens and built-in barbecue areas attract premium offers. These features signal lifestyle quality to Australian buyers. Pool and spa installations appeal to specific buyer segments. Covered alfresco areas extend entertaining seasons Established gardens create immediate visual impact Privacy screening increases buyer comfort and interest Outdoor lighting enhances evening presentation appeal Storage Solutions and Practical Features Adequate storage influences buyer decisions more than many sellers realise. Property Council of Australia data indicates 58% of buyers cite storage as a deciding factor. Walk-in wardrobes and garage space attract family buyers specifically. Built-in storage solutions demonstrate thoughtful property design. Buyers mentally calculate furniture and storage costs during viewings. Properties with insufficient storage receive discounted offers. Garage space remains essential for Australian suburban buyers. Double garages with internal access command significant premiums. Additional workshop or storage areas appeal to specific demographics. Walk-in wardrobes signal luxury in master bedrooms Linen cupboards address practical family storage needs Garage storage systems demonstrate organised living potential Under-stair storage maximises usable space efficiently Energy Efficiency and Sustainability Features Sustainability features increasingly influence Australian buyer decisions. Energy Rating Australia reports 67% of buyers consider energy efficiency important. Solar panels and efficient appliances reduce ongoing ownership costs. Rising energy costs make efficiency features financially attractive. Buyers calculate long-term savings when comparing properties. High NatHERS ratings signal quality construction and insulation. Smart home technology appeals to younger buyer demographics. Automated lighting, climate control, and security systems add perceived value. These features differentiate properties in competitive markets. Solar panel systems reduce ongoing electricity costs Double-glazed windows improve thermal efficiency LED lighting throughout signals modern electrical systems Rainwater tanks appeal to environmentally conscious buyers Street Appeal and First Impressions Street appeal determines whether buyers enter properties with positive expectations. McGrath Estate Agents research confirms 94% of buyers form opinions before entering. Landscaping, paintwork, and entrance presentation create lasting impressions. Front door quality signals overall property standards. Fresh paint and modern hardware cost little but impact significantly. Symmetrical plantings and defined pathways guide buyer attention. Driveway condition and fencing influence perceived maintenance standards. Cracked concrete and peeling paint suggest deferred maintenance. Clean, well-maintained exteriors justify premium pricing expectations. Fresh exterior paint creates immediate positive impressions Manicured lawns signal property care and maintenance Modern front doors indicate updated interior finishes Clear house numbers and lighting enhance presentation Conclusion Understanding buyer psychology helps you prioritise renovations that deliver returns. Location, kitchens, and bathrooms consistently drive Australian property decisions. Strategic upgrades in these areas attract premium offers and faster sales. Sydney Home Renovation specialises in bathroom transformations that maximise property value. We combine transparent pricing with quality workmanship to deliver move-in ready results. Our detailed budgeting ensures your renovation investment translates to measurable returns. Contact us today to discuss how a strategic bathroom renovation can become your property's biggest selling point. We help homeowners and investors renovate with confidence and achieve their property goals. FAQs What features add the most value to a house in Australia? Updated kitchens and bathrooms add the most measurable value. Location and outdoor living spaces also significantly influence Australian property prices. Energy-efficient features increasingly attract buyer premiums. How does buyer psychology affect property pricing? Buyers form emotional connections within seconds of viewing. First impressions and perceived renovation costs directly impact offer amounts. Move-in ready properties consistently achieve higher sale prices. What turns buyers off when viewing a house? Dated bathrooms, poor natural light, and deferred maintenance create negative impressions. Unusual layouts and lack of storage also concern buyers. Strong odours and visible damage trigger immediate rejection. How important is street appeal when selling a house? Street appeal determines buyer expectations before they enter. Most buyers form opinions within the first 30 seconds. Landscaping and exterior presentation directly influence perceived property value. Do renovations always increase property value? Strategic renovations in kitchens and bathrooms typically deliver positive returns. Over-capitalisation occurs when renovation costs exceed value added. Market research and professional advice prevent costly mistakes. What do first home buyers look for in Australia? First home buyers prioritise location, price, and move-in readiness. They often lack renovation budgets and skills. Modern kitchens, bathrooms, and low-maintenance features attract this demographic. How can I make my house more appealing to buyers? Focus on presentation, cleanliness, and minor updates first. Address obvious maintenance issues before listing. Professional styling and photography maximise buyer interest and competition.

Bathroom renovations are the most in-demand home improvement in Australia for 2026, followed closely by kitchen upgrades and energy-efficient installations.

Many homeowners struggle to decide where to invest their renovation budget. They want improvements that add value and suit modern lifestyles. Choosing the wrong project can lead to wasted money and disappointing returns.

The solution lies in understanding current market trends and buyer preferences. Bathrooms consistently deliver strong returns while improving daily comfort.

In this blog, we will explain what is the most in-demand home improvement in 2025 (Australia)?

Why Bathroom Renovations Lead Australian Home Improvements

Australian homeowners are prioritising bathroom upgrades above all other projects in 2025. Recent industry data shows bathroom renovations account for approximately 35% of all residential improvement spending. This trend reflects changing lifestyle priorities and the desire for spa-like retreats at home.

Several factors drive this demand:

  • Daily usage frequency makes bathrooms high-impact spaces
  • Ageing fixtures in older Australian homes need replacement
  • Water efficiency requirements push upgrades forward
  • Resale value considerations favour updated wet areas

The average Australian bathroom renovation costs between $15,000 and $35,000 for a standard upgrade. Premium renovations can exceed $50,000 depending on size and specifications. These investments typically return 60-70% of costs at resale.

Homeowners increasingly view bathrooms as personal wellness spaces. They want features like rainfall showers, freestanding baths, and heated flooring. This shift explains why bathroom projects dominate renovation budgets nationwide.

Kitchen Upgrades Remain a Close Second

Kitchens continue ranking as the second most popular home improvement category. Australian homeowners spent an average of $26,000 on kitchen renovations in 2024. This figure reflects growing interest in open-plan living and entertaining spaces.

Modern kitchen trends include:

  • Stone benchtops replacing laminate surfaces
  • Integrated appliances for seamless aesthetics
  • Butler’s pantries for hidden storage
  • Smart technology including touchless taps

Kitchen renovations deliver strong returns for property investors. Well-executed kitchen upgrades can add 5-10% to property values. The key lies in balancing quality finishes with sensible budgeting.

Many homeowners combine kitchen and bathroom projects. This approach maximises tradesperson efficiency and reduces overall costs. It also creates consistent design language throughout the home.

Energy Efficiency Improvements Gaining Momentum

Sustainability-focused upgrades are rapidly climbing the popularity charts. Solar panel installations increased by 28% across Australian households in 2024. Rising electricity costs drive this trend alongside environmental awareness.

Popular energy efficiency improvements include:

  • Solar panel systems with battery storage
  • Double-glazed windows for thermal performance
  • LED lighting upgrades throughout homes
  • Insulation improvements in ceilings and walls
  • Heat pump hot water systems replacing electric units

The average solar system installation costs between $5,000 and $12,000 after rebates. Payback periods typically range from 3-5 years depending on usage patterns. These improvements also attract environmentally conscious buyers.

Government incentives continue supporting energy upgrades. State-based rebate programs reduce upfront costs significantly. This financial support accelerates adoption rates across all demographics.

Outdoor Living Spaces Transform Australian Homes

Australians embrace outdoor living more than most nations. Deck and patio projects represent approximately 18% of renovation spending. The climate supports year-round outdoor entertaining in most regions.

Trending outdoor improvements include:

  • Covered alfresco areas with ceiling fans
  • Outdoor kitchens with built-in barbecues
  • Timber decking using composite materials
  • Landscaping upgrades with native plants
  • Pool installations or renovations

Outdoor projects extend usable living space affordably. A quality deck installation costs between $200 and $500 per square metre. This investment creates additional entertaining capacity without major structural work.

Property valuers recognise well-designed outdoor spaces. They contribute to overall property appeal and functionality. Buyers increasingly expect seamless indoor-outdoor flow in Australian homes.

Smart Home Technology Integration

Technology upgrades are becoming standard in Australian renovations. Smart home device adoption grew by 34% among Australian households in 2024. Homeowners want convenience, security, and energy management features.

Popular smart home additions include:

  • Automated lighting systems with app control
  • Smart security cameras and doorbell systems
  • Climate control automation for efficiency
  • Voice-activated assistants integrated throughout
  • Automated blinds and window treatments

These upgrades appeal particularly to younger buyers. They expect homes to offer technological convenience. Integration during renovation proves more cost-effective than retrofitting later.

Smart technology also supports energy efficiency goals. Automated systems optimise heating, cooling, and lighting usage. This reduces ongoing costs while improving comfort levels.

How to Budget for High-Demand Renovations

Successful renovations require careful financial planning from the start. Cost blowouts affect approximately 40% of Australian renovation projects. Proper budgeting prevents stress and ensures project completion.

Essential budgeting steps include:

  • Obtain multiple quotes from licensed contractors
  • Add 15-20% contingency for unexpected costs
  • Prioritise structural work before cosmetic finishes
  • Research material costs before finalising designs
  • Consider staged approaches for larger projects

Hidden costs often surprise first-time renovators. These include permit fees, temporary accommodation, and waste removal. Experienced contractors help identify potential cost traps early.

Financing options vary depending on project scope. Home equity loans offer competitive rates for major renovations. Personal loans suit smaller improvement projects under $20,000.

Maximising Return on Renovation Investment

Not all improvements deliver equal returns at resale. Strategic renovations can increase property values by 10-15%. Understanding buyer preferences guides smart investment decisions.

High-return improvements include:

  • Bathroom modernisation with quality fixtures
  • Kitchen updates focusing on functionality
  • Additional living space through extensions
  • Street appeal enhancements including facades
  • Energy efficiency upgrades with documentation

Over-capitalisation remains a significant risk. This occurs when renovation costs exceed potential value gains. Research comparable sales before committing to major projects.

Location influences return expectations significantly. Inner-city properties support higher-end finishes. Suburban homes benefit from practical, family-focused improvements.

Conclusion

Bathroom renovations clearly lead Australian home improvement demand in 2025. They combine lifestyle benefits with strong investment returns. Energy efficiency and outdoor living projects follow closely behind.

At Sydney Home Renovation, we specialise in delivering bathroom transformations that maximise value. Our transparent pricing and detailed budgeting help you avoid costly surprises. We guide homeowners through every decision with honest, practical advice.

Contact us today to discuss your renovation goals. We provide comprehensive quotes and realistic timelines for your project. Let our experienced team help you create the bathroom you deserve.

FAQs

How much does a bathroom renovation cost in Australia in 2025?

Standard bathroom renovations cost between $15,000 and $35,000 in Australia. Premium projects with high-end finishes can exceed $50,000. Costs vary based on size, fixtures, and structural changes required.

What home improvements add the most value in Australia?

Bathroom and kitchen renovations deliver the strongest returns. Energy efficiency upgrades also attract buyers and reduce ongoing costs. Well-designed outdoor living spaces add significant appeal in the Australian market.

How long does a typical bathroom renovation take?

Most bathroom renovations take 2-4 weeks to complete. Complex projects involving structural changes may require 6-8 weeks. Proper planning and material ordering reduce unexpected delays.

Should I renovate before selling my property?

Strategic renovations can increase sale prices significantly. Focus on bathrooms, kitchens, and street appeal for best returns. Avoid over-capitalising by researching comparable sales in your area first.

What are the hidden costs in home renovations?

Common hidden costs include permit fees, asbestos removal, and structural repairs. Temporary accommodation and waste disposal add unexpected expenses. Always include a 15-20% contingency in your budget.

Are energy-efficient upgrades worth the investment?

Solar panels typically pay back within 3-5 years through electricity savings. Double glazing and insulation improve comfort while reducing bills. These upgrades also appeal to environmentally conscious buyers.

How do I choose a reliable renovation contractor?

Check licences, insurance, and recent project references carefully. Obtain detailed written quotes from at least three contractors. Look for clear communication and transparent pricing throughout the quoting process.