Turnkey, Renovate or Build: Which Strategy Actually Works in 2025?
In This Week’s How's The Market | Edition 143
Turnkey, Renovate or Build: Which Strategy Actually Works in 2025?
Why Buyers Are Paying Premiums for Certainty
Market Update
Entire Melbourne Market
1,552 auctions last weekend (14th December)
Clearance rate: 48.4% (unchanged from the week before)
Seventh consecutive weekly decline from the August peak of 61.1%
$1.5m+ Inner-Melbourne Market (Boroondara, Stonnington, Port Phillip & Yarra)
33 auctions
Clearance rate: 42.42%
The premium market underperformed the broader Melbourne market last weekend
Weekly Topic: Turnkey, Renovate or Build: Which Strategy Actually Works in 2025?
Melbourne isn't operating as one market anymore.
It's three completely different markets and buyers are voting very clearly with their wallets.
Here's what you need to know:
The Three Markets
Turnkey / Fully Renovated Homes
Unrenovated / Original Condition Homes
Land / Knockdown / Build Sites
And the gap between them is widening fast.
What We're Seeing on the Ground
Turnkey & Renovated Homes
Strong competition at auctions
Shorter days on market
Buyers paying premiums for certainty
Emotional buyers prepared to stretch
Unrenovated Homes
Longer campaigns
More passed-in auctions
Heavier negotiation post-auction
Buyers demanding discounts to justify risk
Land & Build Sites
Narrower buyer pool
Finance and feasibility challenges
Construction costs killing margins
Developers being far more selective
Why Turnkey Is Winning in 2025
1. Cost Certainty
Build costs remain volatile. Renovation budgets routinely blow out. Buyers are traumatised by stories of overruns and delays.
2. Time & Lifestyle
Most owner-occupiers don't want 12–24 months of disruption. Families want to move in now, not "someday". Dual-income households value convenience over upside.
3. Finance Constraints
Banks are conservative on construction lending. Valuation shortfalls are common on unrenovated stock. Many buyers simply can't afford surprises anymore.
Why Unrenovated Homes Are Struggling
The Reno Maths No Longer Stacks Up
Labour shortages. Material cost inflation. Builder insolvencies. Holding costs add up fast.
If the discount isn't big enough to cover all that risk? Buyers walk.
Buyers Are More Informed
Renovation TV shows have met reality. Buyers are padding budgets by hundreds of thousands. They know the real cost now.
Risk Is Being Priced In
Structural unknowns. Planning uncertainty. Council delays. Weather, labour and material risks.
The discount needs to be substantial—or it's not worth it.
What About Building From Scratch?
It can work... but only for the right buyer.
You need:
Long time horizons
Strong cash buffers
Access to good builders
High risk tolerance
For most owner-occupiers in 2025, building is a strategy, not a lifestyle decision.
What The Agents Are Saying
Final auction weekend of 2025 delivered mixed results
Turnkey properties continue to outperfor
Unrenovated homes requiring heavy negotiation post-auction
February/March listings expected to be lower than usual
Buyers staying active over the holiday period are finding less competition
The Wow Factor!
2 Lorac Avenue, Brighton, Vic 3186
Brighton’s Mediterranean Villa of Unrivalled Scale
Why it WOWs:
Grand Mediterranean villa on a sprawling estate with lush gardens
Heated pool, spa, alfresco kitchen & entertainer’s zones
Five-car basement garage, workshop, gym & climate-controlled wine cellar
Palatial interiors with premium finishes & 180° garden views
Prime Brighton location near beaches, Bay Street & top schools
Price guide : $6,800,000 – $7,200,000
Final Thoughts
The market has split into three distinct lanes—and each one requires a completely different strategy.
The question isn't whether you should buy turnkey, renovate, or build. It's whether you understand the real cost of the path you're choosing.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
