The number of Australian home-owners undertaking renovations on an annual basis has hit a four year, post-GFC high, according to new research released by Westpac.
Against the backdrop of rising house prices; residential alteration and addition projects have more than doubled – increasing by 147 per cent since August 2010, marking a stark turnaround from the downwards renovation trend that took place between 2002 and 2009.
The value of household renovations has also recently risen, with $600 million in approved residential renovations and conversions in August 2014, up 40 per cent from the recent low point in December last year.
The increase in the last 12 months has coincided with a further boost to house prices as low interest rates have worked their way through the economy and home-owners have opted to renovate rather than move.
The Westpac Renovation Report, compiled by RP Data and Sweeney Research, has listed the Sydney region of Mosman as the most renovated location (by value) in Australia.
Home owners in regional Australia are also embracing the renovation trend, with the Victorian Point Nepean region coming in second with more than $41 million in residential approvals over the past year.
“Favourable market conditions across Australia means that many home owners have seen the value of their properties rise. As a result, one quarter of Australians1 have been able to service additional borrowings to tap into this added value and extend or improve their home further and stay in their preferred location rather than moving to a bigger home elsewhere,” said Gai McGrath, Westpac General Manager of Retail Banking.
While the majority (64 per cent) of renovators still finance their home improvements through savings, more than one in four (26 per cent of those aged 18-54) are choosing to finance their renovations by increasing or topping up their home loan.
“Existing home owners who may once have looked to upgrade into a new home are choosing instead to renovate, adding desired rooms, features and cosmetic changes.
“This can be a smart investment strategy as it means avoiding the costs associated with upgrading to a new home, like moving services and stamp duty.
“If you are renovating, not only are you improving your current surroundings and tailoring your home to suit your needs, but it can also add value to your property if you come to sell in the future.”
Home owners who are looking to renovate can visit their local Westpac branch and speak with a Home Finance Manager on the best plan for their situation.
1 Source: Sweeney Reseach taken from The Westpac Renovation Report