Young people are more likely to renovate their homes than upgrade

When it comes to investing in residential property, Millennials appear to be outsmarting their baby boomer counterparts.

According to new findings from Houzz, almost half of Australian homeowners (46%) opt to take on renovation work on their current properties instead of buying their dream homes. Among various reasons, homeowners choose to renovate rather than upgrade because they want to remain in their current neighbourhoods (33%) and because staying put is more affordable (29%).  

Rather interestingly, the data reveals Millennials are the age group most likely to renovate because it is more affordable. More than a third (36%) of Millennials cited affordability as the top reason for renovating versus upgrading.

According to Jason Chuck, Houzz’s managing director, the data reveals how much savvier young homebuyers are, as many know a thing or two about making their money stretch in the property market.

“I think given the current real estate climate, [Millennials] are quite active when it comes to home upgrades and this allows them to be more open minded to the types of homes they are willing to consider,” Chuck said.

“I think they’re thinking a lot more proactively around their home, and I think they are putting a lot of thought into the fact they are trying to find homes they can invest in and that they believe are going to be strong return on investment.”

“We are hearing from this generation that they perceive the homes that can be renovated are a much better return on investment. It is something they can invest in overtime as well.”

On average, Millennials spent $41,000 on renovations in 2015, with many dipping into their personal savings to finance their projects. This follows a general nationwide trend, as many homeowners are opting to upgrade their current properties instead of moving up the property ladder due to rising house prices and less favourable rates from lenders.