This question didn't even arise when architect Michael Bellemo and his life and business partner, designer Cat Macleod, first saw their ''unfashionable'' home in Northcote, Melbourne. Located on one of the highest points in this inner-city suburb, the house, built in 1961 by a master builder, was in almost original condition.

''We actually got a tip-off from a friend. He said that an ''ugly'' house just around the corner from our office had just been listed and given it was ugly, we'd probably love it,'' says Macleod.

The couple were looking for a family home for themselves and their two young children, and couldn't see any blemishes. They loved the simple, unadorned brick facade and all the original fixtures and fittings, from the bathroom to the kitchen, still with its turquoise-coloured cupboards.

The large block, more than 500 square metres, included a deep rear garden, resembling a bush setting. With the prices for many period homes in their street heading north of $1.5 million, they were delighted to buy this house for well under $1 million 18 months ago.

With a modest budget of $250,000, Bellemo and Macleod slightly modified the home, adding a pavilion-like first floor in timber and glass. Creating a ''halo'' around this rectilinear form is a continuous bright-yellow steel ribbon.

''We looked at all the gargoyles on the tiled roofs of the period homes in our street. We wanted to create a contemporary decorative piece,'' says Bellemo.

This curvaceous addition was also inspired by Isamu Noguchi's mid-20th-century coffee table.

As much as possible was recycled in the home, from light fittings to cupboard doors, some of the latter used to make a feature wall for one of the children's bedrooms.

One of the few structural changes was the addition of a staircase, clad in plywood, with a picture window over the void to take advantage of the established eucalypts in the back garden. But it's the first-floor pavilion, fully glazed and clad with plywood, which makes visitors see the house differently. The 180-degree view from the city to the Dandenong Ranges keeps one spellbound. But why couldn't others see the potential?

''The original flat roof would have deterred some people,'' says Bellemo. ''For Cat and I, it meant the possibility of adding a second level that wouldn't break our budget.''

The worn timber floors would have had some thinking ''new carpet''. ''We just lightly varnished the floors. A lot of people now pay quite a lot of money to have their floors given the distressed look,'' says Macleod.

There are other plans in the wings, such as a west-facing awning, made from PVC pipe remnants. The pair are delighted with their home.

When the house first went on the market, they saw people driving up to see the sales board, looking at the house and doing an immediate U-turn. ''People often lack vision, which is why, I suppose, they employ people like us,'' says Bellemo, who, with Macleod, did most of the work.

Architect Jon King, director of Design King Company, also knows how to transform an unfashionable home into something special. He recently completed a renovation to an early 1930s home, built during the Depression. Located in Maroubra, 20 minutes' drive from Sydney's CBD, the house was described as ''ugly'' by those who saw it.

''The opinion was probably exacerbated by the rudimentary two-storey extension from the 1980s,'' says King, whose clients loved the location, a stone's throw from the beach, including views to Bondi Beach.

The owners, a couple with three children and an extended family who regularly stayed, looked past the peeling paint and little or no front garden. ''Their main concern was that there was no laundry or a water tank. They were also concerned that the workshop and storage areas [1980s] were dilapidated and needed replacement,'' says King.

With a budget of $500,000, King designed a new pavilion that includes a bathroom, laundry, shed and workshop. A roof terrace above this wing also benefits from views of the leafy surrounds and, in keeping with the brief, a water tank was provided below ground. ''I left as much intact as possible. However, the windows were replaced with double glazing to improve energy retention,'' says King.

Rather than trying to conceal the Maroubra house behind a contemporary ''veil'', King accentuated its simple form with a coat of pink paint. The same pink was used on some of the interior walls. Equally preserved was the narrow front terrace, barely one metre wide, complete with a quirky built-in shelf to place drinks.

While King, Bellemo and Maclean can see past what many see as ''ugly'', others can develop these skills. ''You need to know how to make spaces work, but you also need to look past what are often considered 'imperfections'. Fashion is transitory, after all,'' says King.