Renovate or Relocate?

What Sydney homeowners are choosing in 2025

With interest rates easing, property prices climbing in some pockets, and building costs still stubbornly high, many Sydney homeowners are standing at a familiar but complex crossroads. Should we renovate or is it time to relocate?

This decision isn’t just financial, it’s emotional, practical, and strategic. And in 2025, the choice has never been more divided.

Let’s break down the key factors driving this decision in today’s market.

Market conditions: Supply in tight, Demand is up

Sydney’s property market, particularly in blue-chip areas like the Eastern Suburbs, continues to be defined by low stock levels and high buyer competition. With auction clearance rates hovering around 75% in the east and quality homes attracting strong prices, sellers are often in the driver’s seat.

At the same time, buyers are facing limited options, especially for renovated family homes. As a result, some homeowners are choosing to stay put and renovate instead of competing in a hot market with little to buy.

💡 Insight: If you own a home with good bones in a desirable area, improving it could be more cost-effective than buying into an inflated market.

Renovation costs in 2025: Still high but stabilising

The pandemic induced supply chain crunch may have eased, but building costs are still well above pre 2020 levels. Labour shortages, material costs and new compliance standards mean renovations are often taking longer and costing 15–25% more than they would have five years ago.

However, we’re now seeing signs of cost stabilisation, particularly for small to mid-scale renovations. This is giving homeowners a little more confidence to invest in their existing properties especially those with under-utilised spaces or dated layouts.

🏗️ Tip: Focus on value-adding projects like open-plan living, kitchen/bath upgrades, or outdoor entertaining spaces. These still deliver strong returns at resale.

The cost of buying & selling: Not just the price tag

Relocating means more than just a higher purchase price. It comes with stamp duty, agent fees, legal costs, and moving expenses, which can total hundreds of thousands of dollars in Sydney.

For many families, the numbers just don’t stack up especially if their current home already meets most of their needs.

Resale value: will a renovation pay off?

In today’s market, well-renovated homes are still commanding a premium, particularly in suburbs where buyer demand remains strong but new listings are scarce.

Key suburbs like Paddington, Bronte, and Bondi have seen double-digit growth in the last 12 months, and buyers are willing to pay a premium for homes that are “move-in ready.” If your property has scope for improvement, a smart renovation can lift both lifestyle value and future resale.

However, overcapitalising is still a risk, especially in suburbs where price growth is slowing (e.g. Vaucluse and Bellevue Hill).

📉 Tip: Get a local appraisal before committing to major renovations to ensure the end value justifies the spend.

What Sydney homeowners are actually doing

More and more homeowners are leaning toward renovating and refinancing rather than selling, particularly those locked into lower-rate loans or who want to avoid the hassle of moving school zones, neighbours or lifestyles.

But those needing more space now and who can afford the jump are still choosing to relocate, especially if they’ve built up strong equity and can access homes in lifestyle-rich locations.

Renovate or Relocate? A Quick Decision Guide

Final thoughts

In a market as complex and fast-moving as Sydney’s, there’s no one-size-fits-all answer to the “renovate or relocate” question. The best move depends on your lifestyle needs, financial position, and long-term goals.

But one thing is clear in 2025 homeowners who plan ahead, understand their property’s value, and make informed choices are the ones getting ahead.