Homebuyers Pay Premium for Extra Bathrooms, Study Reveals

Research indicates that homeowners are willing to pay significantly more for properties with additional bathrooms. According to data from Cotality, formerly known as Corelogic, the demand for extra bathrooms reflects changing household dynamics and preferences.

Value of Additional Bathrooms

The study, led by Nick Goodall, examined the price differences between three-bedroom houses with and without an extra bathroom in various regions. When factors such as floor size, land area, and the decade built were kept constant, the findings revealed that the value of a second bathroom can vary considerably. In Waitakere, buyers are prepared to pay an additional $39,000 for a second bathroom. This figure rises to $62,000 in Manukau, $65,000 in Hamilton, $51,000 in Tauranga, and $59,000 in Christchurch.

Goodall noted that the differences in values may correlate with household sizes in these areas. “If household sizes are higher in Manukau, Hamilton, and Christchurch, then perhaps buyers value the extra bathroom there more,” he explained. The trend of including two bathrooms in newly constructed three-bedroom homes emerged prominently in the 2000s, highlighting shifting expectations in home design.

Changing Household Dynamics

The desire for multiple bathrooms is increasingly apparent, even in homes with only three bedrooms. Goodall emphasized the practical benefits of having an additional bathroom, particularly for families. “Anyone with kids will know that we personally added a bedroom and a bathroom. The bathroom is almost the most important because kids will share a bedroom, but when there are four or five people in a household, that second bathroom is pretty important.”

The data suggests that investing in an additional bathroom can yield a return when selling a property. Goodall stated, “If a buyer is likely to be willing to spend $40,000 to $60,000 more… it looks like the additional value.” He also reassured homeowners that spending around $30,000 on renovations for a bathroom is unlikely to result in overcapitalization.

For property investors, the presence of an extra bathroom may enhance rental appeal rather than significantly increase rental prices. Steve Goodey, a property investor, described additional bathrooms as a bonus and noted that homes with more than two bedrooms should ideally include an extra toilet.

Real estate salesperson Brooke Gibson stated that having only one bathroom can limit market interest and potentially affect pricing. Despite this, she remains optimistic, suggesting that buyers should focus on affordability. “I’m a huge believer in you buy what you can afford and make it work,” she said.

The findings from Cotality’s research illustrate a clear trend in the real estate market, where an extra bathroom is increasingly viewed as a valuable asset. As household structures evolve, homebuyers are prioritizing functionality and convenience in their property searches.