Renovation activity remained strong in 2018 and is destined for robust growth in 2019, according to the annual Houzz & Home Australia survey.
Taking into account the responses of more than 8,800 people, the survey found kitchens were the most popular room to renovate, with 26 per cent of respondents keen to spruce up their cook’s room. Renovation spend in the kitchen grew by 16 per cent in the past year to a median spend of $20,000.
This was followed by 23 per cent of respondents renovating their living rooms, while bedrooms, bathrooms and laundries were all equally popular this year at 17 per cent.
Overall, renovation activity remained strong through 2018 with half of homeowners on Houzz renovating an average of three rooms per project, at an overall median spend of $20,000.
At the higher end of the market, renovation spend in the 90th percentile reached $180,000.
Baby Boomers (ages 55-74) and Gen Xers (ages 40-54) combined represent 79 per cent of the renovation activity, at a median spend of $21,000 and $23,000, respectively.
Nearly half of renovating homeowners planned to continue or begin renovations this year (47 per cent), with 41 and 35 per cent of Gen Xers and Baby Boomers, respectively, anticipating new projects.
Houzz principal economist Nino Sitchinava said despite a number of headwinds for the global and national economy, renovation activity continued to keep pace in 2018 and will likely experience a robust growth in 2019.
“Pent up demand continues to drive renovation activity, while spend on discretionary projects such as kitchens continues to grow, signaling strength in consumer confidence,” Sitchinava said.
As homeowners considered whether to renovate their current home or to purchase a new home, the top two considerations for renovating are to stay in their current home or area, outranking return on investment.
Wanting to stay in the current home is the biggest decision driver for Baby Boomers and Gen Xers, whereas Millennials (ages 25-39) chose to stay in their current home and renovate because it was more affordable than moving.
Funding Renovation Projects
The majority of renovating homeowners pay for renovations using cash from savings (76 per cent), followed at a distance by credit cards that can be used anywhere (19 per cent) and cash from home mortgage refinance (13 per cent). Interestingly, reliance on credit cards is higher in Millennials than in older generations.
Finding the Right Professional for the Job
Nine in 10 renovating homeowners hired a professional in 2018 (90 per cent), with electricians, plumbers and carpenters in greatest demand (62, 51 and 40 per cent, respectively). Baby Boomers are more likely to hire professional help than Millennials by 10 per cent (93 per cent versus 83 per cent).
Making “Smart” Decisions
More than one in 10 homeowners prioritise smart technology during home renovations (12 per cent), purchasing products like home assistants, streaming media players and security cameras. Baby Boomers are more likely than Gen Xers and Millennials to rank smart technology as high priority (15 per cent versus 10 and 9 per cent, respectively), however Millennials are still incorporating the most home assistants (22 per cent), compared with Baby Boomers (11 per cent).
Improving Energy Efficiency
While improving the design and functionality of a home are the top priorities during renovations, more than two in five homeowners prioritise energy efficiency (43 per cent), replacing windows and insulation, for example. This is particularly important for Baby Boomers when compared to Gen Xers and Millennials (50 per cent versus 39 and 36 per cent, respectively).
The Final Touch
Nearly two-thirds of renovating homeowners in 2018 also decorated or furnished their home the same year (65 per cent). Millennials were significantly more likely to decorate following home renovations than Baby Boomers (73 versus 60 per cent), purchasing products such as pillows, throws and interior furniture.
The Houzz & Home Survey
The annual Houzz & Home survey is the largest survey of residential renovating, building and decorating activity published. The survey covers a wide range of renovation projects in 2018, from interior renovations and additions to home systems, exterior upgrades and outdoor projects. Data gathered includes historical and planned spends, professional involvement, motivations and challenges behind building, renovation and decorating projects, as well as planned activities for 2019. The 2019 study includes more than 8,800 respondents in Australia alone, providing insights into the home improvement activity of the more than 40 million monthly unique users of the Houzz site and mobile apps.
The Houzz & Home Survey was sent to registered users of Houzz Australia and fielded in April 2019.
The full report is available here.