Can’t afford a new home in Sydney? Three-quarters of Aussies are renovating instead
Article by Kelly Emmerton
In the face of sky high property prices that don’t look like dropping any time soon, Aussies are opting to renovate their home rather than trading in for a newer property, according to Westpac’s Home Ownership Report.
The nationwide study behind the report found that a whopping 76% of Australian homeowners are in some stage of the renovation process, with one in five of those currently renovating, while nearly half were considering future renovations.
It also found that among Aussies considering a housing-related change in the next five years, home renovation was the top priority for almost a third of them.
So why the sudden surge in renovations? The inspiration might come from popular home renovation shows like The Block as 74% of homeowners said their main reason for getting out the tool belt were to have a nicer home.
Homeowners who were getting married or having a baby were also most likely to be considering renovations, showing that life stages play a role as well. This may explain why Gen Y was more likely to be renovating (23%) or considering a renovation (46%) than their Gen X or Baby Boomer counterparts.
These younger Gen Y home owners also may have been more likely to buy “fixer-upper” properties, in order to enter an ever more competitive market, making the recent surge in renovations inevitable.
Chris Screen, Westpac Group Head of Home Ownership, said the swell of interest in home renovations could be inspired by an increasingly competitive housing market.
“With rising property prices and intense competition for property in metro areas, many homeowners are looking to renovate their existing property rather than sell and risk losing their position in the market,” said Screen.
Mozo’s resident home loan expert, Steve Jovcevski, says another reason young homeowners may be opting to renovate rather than buy a new home is the high price of stamp duty.
“On a $750,000 home, you could pay around $29,000 in stamp duty. So it’s no wonder people prefer to funnel that money into renovations on their current home instead of the government’s coffers,” he said.
He added that in the current strong housing market, many renovators were using the increased equity in their homes to fund renovations.
So if you’re thinking about a home makeover this year, a home equity loan or refinancing your home loan to a line of credit mortgage could be the perfect way to pay for it. Head over to our home loan comparison table to find some of the best refinancing deals around, or read more about the best ways to fund your renovations.