By Joseph Wong

An increasing number of owners are opting to renovate their existing homes into bigger units and it is not just them. Many new buyers are also opting to purchase ageing terraced or linked houses in established suburban areas and renovating them to better fit their lifestyles. 

Rather than choosing newer, more affordable homes located further from urban centres, these buyers are choosing older properties situated closer to the city or near public transportation stations.

While some home owners make minor adjustments to these houses, others are taking more drastic measures. Some are completely demolishing the existing structures and erecting entirely new ones in their place, often transforming both the interior and exterior to the extent that they bear little resemblance to the original design or specifications.

In the case of single-storey linked houses, many are being renovated into one-and-a-half or double-storey homes while double-storey ones are turned into two-and-a-half or three-story dwellings. 

According to several property agents one reason behind the increase in this phenomenon is the soaring property prices. Old houses tend to be more affordable compared to newly launched properties, despite their potential to offer new designs, concepts and lifestyles.

Furthermore, advancements in technology, better materials and innovative ideas make rebuilding or renovating old houses easier and more tailored to the owners' preferences. Similarly, smaller homes can be expanded to accommodate growing families even if it means just adding on an additional room..

While the trend of rebuilding or remodelling old houses is not entirely new, it has seen a surge in frequency in recent years. "This trend was already present a decade ago, but we are witnessing an increasing number of such cases," a property agent remarked, anticipating further growth in the rebuilding of houses.

Raising property value

In many instances, renovating homes in a neighbourhood tends to drive up property prices, provided the renovations are reasonable and approved by local authorities.

Prospective buyers of older homes in the area will consider the potential added value and benefits of renovations or rebuilding. Additionally, property valuers factor in the increased built-up area and functionality of additional space, leading to higher property valuations.

It is almost certain that such properties will command a higher value within the row of linked houses. An example of this scenario was a double-story terraced house in Seri Kembangan, Selangor, which was completely demolished and rebuilt over a decade ago. At the time, the house was valued at approximately RM200,000.

After reconstruction, the total cost of the new house, including the land, was estimated at RM380,000. "Today, this property can command a 20% higher price than neighbouring houses, which are valued at around RM800,000," said the agent.

A quick survey showed that a 20% difference between an enlarged home after rebuilding an older house versus the surrounding ones is possible. In some cases, the increase is higher, but there are also lower estimates as some homes just underwent minor extensions.

There is no absolute figure as the majority of these homes are enlarged for the owners’ own stay, and not for resale. The increment is also subject to what was done and how extensive was the refurbishment and enlargement of the home. As each project is individualised to suit the owners’ needs, the data on the increased value of the property is only based on estimates.Customising to individual needs

One significant advantage of rebuilding is that owners can customise the houses according to their preferences and lifestyle. 

Moreover, there are some home owners who feel that they would be overcharged if they were to purchase a new home and still need to renovate it to meet their specifications. Another factor contributing to the trend of buyers moving back into older areas is the location, most agents agreed.

"Travel time, especially during peak hours, is crucial. Therefore, purchasing houses closer to the city makes more sense, as unexpected traffic jams can occur due to accidents, rain, floods, or roadblocks," one agent explained.

He added that there's a sense of security in matured housing estates as they may evoke personal memories, such as childhood days, for the residents. Moving to new areas further away from the city could lead to feelings of unsettledness due to unfamiliar aspects like navigating access routes and finding local amenities and shopping venues. 

Therefore, he suggested that new neighbourhoods should be meticulously planned to attract buyers who see the potential for capital appreciation due to the affordability of the houses.

However, there are also individuals who purchase strategically located old properties with the intention of converting them into hostels. This allows them to increase rental yield by leasing rooms to students or workers.

While councils typically lack specific guidelines for such conversions, as renovation works usually occur within the house itself, transformed homes can negatively impact surrounding property values if not properly managed.

Reports have highlighted complaints about noisy students and blocked access ways due to multiple vehicles belonging to a single household.

Ultimately, the impact on property value depends on the new owner. A responsible owner who renovates the house with an attractive facade is likely to increase its value, whereas someone solely interested in quick profits may undermine its value.

Procedures for renovations

Kuala Lumpur City Hall (DBKL), Petaling Jaya Municipal Council (MBPJ) and several other councils within Malaysia permit home owners to optimise available space within their property boundaries for renovation and expansion. However, this freedom does not imply unrestricted liberty for property revamping. Each council maintains a set of building guidelines, as explained by a DBKL insider.

"There are constraints. For instance, renovations must stay within the confines of the property," she said, and this rule appears to apply across the board for other councils in Malaysia, even Sabah and Sarawak.

All applications for house renovation or reconstruction must be submitted by a qualified engineer, architect or registered draughtsman, as agreed upon by the councils. DBKL, MBPJ and Subang Jaya Municipal Council advise home owners to follow the proper procedures and consider hiring professionals to design and oversee renovations in accordance with council guidelines.

Approval of renovation works is not guaranteed, with DBKL and MBPJ acknowledging instances of owners circumventing legal procedures. Some do so to cut costs while others may simply be unaware of the regulations. Additionally, there are cases where errant contractors falsely claim to be knowledgeable about council guidelines.

"An approved renovation can save owners both time and money and may increase property value. If an illegal structure must be removed, owners incur losses. Hence, we encourage homeowners to consult us if they have doubts," emphasised the source.

DBKL's Building Control Department specifies that houses can be fully extended to the back and owners can add an extra storey beyond the original design, allowing single-storey homes to become double-storey and double-storey ones to become triple-storey, provided the width is at least 5.5m.

Each council has its own specifications and limitations, prompting homeowners to verify with their respective councils before initiating any renovation work. However, those undertaking renovations should be mindful that not all neighbours will welcome such changes. 

Complaints regarding noise, dust during construction, loss of view, airflow and sunlight are common, according to the DBKL source. 

Finally, expect the assessment rate of the renovated property to rise as additional square footage has been added and naturally, this increases the property value, hence, subjected to higher council rates. 

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