The renovation space appears to be heating up as more Australian homeowners take on home improvement projects.
According to the latest Houzz survey, home renovation activity reached its highest level since 2019, with nearly half of homeowners renovating their homes in 2021.
The median renovation spending also increased to $30,000 in 2021 from $21,000 in 2020.
These strong figures are likely to persist, with 49% of homeowners planning to renovate anytime this year while nearly two-fifths are planning to decorate.
Meanwhile, homeowners’ planned spending is likely to increase to $25,000 for 2022 versus $15,000 in 2019, a 67% jump.
Homeowners with higher-budget renovations projects are planning to spend $138,000 on projects in 2022.
Houzz Australia managing director Tony Been said the results reflect the commitment of Australian homeowners to invest in their homes despite the rising costs of construction and the disruptions in the global supply chain of construction materials.
“This is especially pronounced among recent homebuyers, who rely heavily on cash from previous home sales to fund their projects and spend significantly more than the national median,” he said.
Recent homebuyers, or those who just purchased their home or have moved in less than a year ago, accounted for 10% of renovating homeowners in 2021.
Those newer homeowners with higher budget projects invested $250,000 for their renovation spend. This is likely attributed to the larger scope projects they undertake, averaging three to four rooms, as well as home systems, such as electrical and plumbing.
How do renovators finance their projects?
According to the study, cash from savings remains the most significant source for funding renovation projects.
However, there was an increase in the number of homeowners financing renovation projects with credit cards.
Recent homebuyers and short-term homeowners were more likely to rely on cash from previous home sales, whereas long term homeowners had more access to cash through refinancing in 2021.
Trends in renovating
The study laid out observations on the trends among homeowners when it comes to renovations.
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Home professionals are becoming more in demand.
Around 94 % of renovators reached out to professionals for their projects in 2021, up from 91% in 2020.
Homeowners relied most heavily on the expertise of specialty service providers such as electricians (68%) and plumbers (54%) for their projects.
Meanwhile, builders (24%) and architects (10%) were the most hired professionals in construction and design-related services and saw a significant jump in 2021 compared with 2020.
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Changing interiors
Another trend uncovered by the study was the priority of seven in 10 renovators in switching up the interiors of their homes.
Kitchens are both the most popular interior room to be upgraded and the room that recorded the highest spend at $20,000.
Projects tackling guest bedrooms, guess bathrooms, an entry or mudroom, and wardrobes also became popular in 2021.
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Boosting home security
Renovators also made invested in home security upgrades — outdoor lighting was the most frequently purchased upgrade, followed by outdoor security cameras.
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Photo by @cal-david-231581 on Unsplash.
Collections: Mortgage News
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