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Home improvements that add value to your home - and those that don't

A man smiles while holding a tablet device like a checklist. A woman sits at a barstool in a home kitchen next to him smiling back
RACV

July 16, 2025

Whether you’re preparing to sell, refinance, or simply want to increase the comfort and appeal of your home, it’s worth knowing which renovations will actually add value – and which ones could end up costing you more than they’re worth.

From kitchen upgrades to backyard overhauls, not all improvements are created equal. Industry experts Kate Ross, RACV Senior Manager Home Energy Development, and Kieran Davies, RACV Trades Head of Home Services, explain which home improvements are – and aren’t – worth the money.

A property valuation may also shed light on potential improvements that you can make, as well as talking to a real estate agent and finding out about other services to aid your buying and/or selling journey.

More: Jobs you should always call a tradesperson for


What home improvements add the most value in Australia?

Repainting

Sometimes the simplest changes make the biggest difference. A fresh coat of paint inside and out can instantly brighten your home and make it feel well-maintained. Choose a qualified painter for a professional look.

"Stick to soft neutrals and light colours to make rooms feel bigger," Davies advises. "Neutral tones tend to have broader appeal and help spaces feel brighter and more open."

Tip: Don’t forget the front door – it’s the first impression many buyers will have.

Landscaping

Street appeal counts. A well-presented front yard and facade can entice buyers before they even step inside. Think tidy lawns, defined garden beds, trimmed hedges, and an appealing entryway. Even modest landscaping projects like mulching, adding lighting, or installing a simple garden border can improve visual impact.

You should also regularly get your gutters cleaned in order to prevent potential property damage.

Tip: Choose native, low-maintenance plants to create a drought-tolerant garden that’s easy to maintain.

RACV tradie and homeowner deciding on wall paint colour

Refreshing your home's paintwork can do wonders for its resale value.

Kitchen makeovers

It’s often said that the kitchen is the heart of the home - and for good reason. A modern, functional kitchen renovation is a major drawcard for buyers and can significantly enhance liveability.

"You don’t necessarily need to gut the space," Davies points out. "Minor upgrades like resurfacing cabinets, installing new benchtops, replacing old tiles or splashbacks or upgrading appliances can dramatically improve the space’s appearance and functionality."

Switching to an induction cooktop can also be a worthwhile upgrade, because it uses less energy to cook your food and is widely considered safe, efficient and practical.

Tip: Choose neutral tones and classic finishes to appeal to a wider audience. Prioritise layout and storage, and tidy up your pantry: buyers love practical kitchens.

Outdoor entertainment areas

Australians love to entertain outdoors. An inviting alfresco area or deck not only enhances your family lifestyle, but also increases perceived living space: a big plus for buyers.

Consider installing a pergola, creating a built-in BBQ area, or adding sliding or bifold doors to connect indoor and outdoor spaces. Decking with seating, heating, and lighting adds year-round usability. Deck cleaning and repairs not only make your outdoor area look better, they make it safer too.

Tip: Keep it simple and weather-resistant. Use composite decking and outdoor-rated materials for durability.

Bathroom renovations

Bathrooms are one of the most scrutinised spaces during property inspections. A clean, contemporary bathroom with modern fixtures can boost both the value and the marketability of your home.

"Replacing outdated tiles, vanities and lighting, along with improving ventilation, makes a big difference," Davies suggests. If space and budget allow, adding an ensuite or second bathroom can also substantially increase value.

Along with getting advice about how to plan and do a bathroom renovation, even for a small bathroom, you may wish to research the advantages of heated towel rails and a high-tech Japanese toilet that includes features like heated seats, bidets and dryers.

Tip: Frameless shower screens, floating vanities, and matte black tapware are stylish upgrades that don’t have to break the bank.

RACV tradie carpenter installing shelves

Kitchen makeovers don't need be a major expense: often updating the fixtures is enough.

Energy efficiency upgrades

Energy efficient home design is becoming more important to homeowners and buyers alike. Solar panels, improved insulation and energy-efficient appliances can significantly improve a home’s sustainability and even reduce energy bills.

"Improving insulation is one of the simplest and cheapest ways to make a home more energy efficient," Ross explains. "If your home is poorly insulated, you’re using more power on heating and cooling than you need to - and paying for it."

Since heating and cooling are the biggest energy users in most homes, it makes sense to install energy-efficient cooling and heating systems. "Wall-hung electric split systems are a great energy-efficient option, as they only heat or cool the spaces you're in and not the entire home, as is the case with old-style ducted systems," Ross says. Many newer, electric ducted systems allow zones to be set up too.

Hot water systems are also major household energy users. Upgrading to a solar or heat pump hot water system is a great option for those looking to update. "They are roughly three times more efficient than traditional electric water heaters," Ross says.

Tip: Look into government rebates and incentives available in Victoria to offset initial installation costs.

Solar systems

Investing in a rooftop solar system can help protect against soaring household bills.

"By investing in solar and then generating and using your own electricity, homeowners can save on energy bills and become more independent from the power grid," Ross says.

In addition, solar battery storage allows householders to store excess solar power to use when they want to, which can deliver major savings on your energy bill. "Instead of sending your excess solar power to the grid and buying it back at night for a higher price, battery storage allows you to store it for use when you need it," Ross explains.

If you own an electric vehicle (EV), you may want to consider installing a dedicated EV charger for convenient charging. Your solar system can even power the EV charger, slashing your energy bills.

RACV tradie fixing air conditioning unit

Energy-efficient cooling and heating keeps occupants comfortable and shaves down energy bills.

Lighting upgrades

Lighting plays a huge role in how a home feels. Dated, dim, or inefficient lighting can make even the most stylish home feel lacklustre.

"Upgrading to LED downlights, pendant fixtures or smart lighting systems can modernise a home and highlight key features like kitchen islands or artwork," Davies says. "LED lightbulbs are also highly energy efficient."

Tip: Ask your electrician to add dimmer switches for flexibility and ambience. Don't forget to update exterior lighting for safety and street appeal.

Flooring replacement

Old, worn carpets or damaged tiles can age a home. Replacing flooring with modern alternatives like engineered timber, polished concrete or quality vinyl plank flooring can transform a space.

Unified flooring throughout open-plan areas enhances flow and creates the impression of more space - something buyers love.

Tip: If replacing isn’t in the budget, professional cleaning or re-staining can give old floors a second life.

Home office or study nook

With hybrid work and remote learning becoming part of modern life, having a dedicated workspace is increasingly sought after.

If you can’t dedicate a whole room, consider building a compact study nook under stairs or within a living area. Thoughtful design, like built-in shelving or a hideaway desk, can make the most of limited space.

"With an increasing number of Australians working from home, thoughtful and usable study spaces are a must-have," Davies says. "It’s also smart to add secondary study spaces for children in locations where the parents can supervise and help them."

Tip: Use task lighting and consider acoustic treatments for a quiet, functional zone.

RACV electrician testing lightbulb

Upgrading your lighting to LED can look great and save money on power.

Home improvements that aren't worth the money

Inferior 'green' products

Buyers often look at the energy star rating and brands of new appliances when inspecting a property, so it’s wise to consider green products in any renovation. But choosing the right ones is key.

"You should always buy the best you can afford in the energy-efficiency space because as a general rule, you get what you pay for," Ross says. "Look closely at the warranties: a product is only as good as the company selling it. You need to have confidence in the company you’re purchasing from."

Swimming pool

A swimming pool can be a blessing on a hot summer’s day – and it’s now possible to run a pool pump using excess power from rooftop solar, making it more energy-efficient. But pools are expensive to install and maintain.

Some buyers even see them as more of a liability than a luxury, especially families with young children or elderly downsizers. So, unless you live in a premium suburb where a pool is expected, it’s unlikely to significantly raise your property value.

"If your family will genuinely make good use of the pool, installing one may be worth it for you," Davies says. "It does depend on the individual buyer. But broadly speaking, we are seeing more people thinking green (with a large investment like that), whether that’s an electric car charger in the garage or a battery."

Tip: Only install a pool if it suits your lifestyle – not just resale potential.

Highly personalised renovations

That hot pink bathroom might bring you joy, but it could be a turn-off for buyers. Renovations that reflect niche tastes, such as themed rooms, eccentric colour schemes, or unconventional layouts, can actually lower your home’s appeal.

While your home should reflect your personality, resale-focused upgrades should aim for broader appeal.

Tip: Think blank canvas. A home that allows buyers to envision their own style will always have an edge.


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The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.