Aussies prioritising renovations over purchases

Westpac, with Lonergan Research, has released new research that has shown that renovation trends have been changing as a result of the pandemic.

According to the research, almost a third of Australians, or 31 per cent, plan to renovate their home in the next five years, while one in five, or 18 per cent, are already in the process of renovating or plan to do so within the next 12 months. 

Based on the data gathered, the top reason for renovating in 2020 was because it remains a more affordable option than buying a new home, with 27 per cent of those surveyed indicating so. 

On average, each Australian who is planning a renovation plans to spend about $82,000 on their project, with one in five (22 per cent)  looking to spend over $100,000. Mostly, renovators will be funding their projects through savings (73 per cent). 

A further 25 per cent of prospective renovators want to do so in order to adjust to changing needs brought about by the pandemic, while a similar proportion (24 per cent) simply want to stay in the same area.

According to Anthony Hughes, Westpac’s managing director of mortgages: “More time at home has prompted Australians to think about their ideal living arrangements, both now and in the future, with the research suggesting home owners are looking to make smaller adjustments in response to changing living or working arrangements.”

Two-thirds (65 per cent) of renovators agree that COVID-19 restrictions have made them consider home alterations to enhance them and their family’s living arrangements. 

More than a quarter (28 per cent) are renovating for reasons relating to the pandemic. One in 10 (11 per cent) are doing so to accommodate working from home more, and nearly one in five (17 per cent) said they’ve had more time during the pandemic to think about home upgrades. 

The most common renovations Australians plan to undertake are landscaping their backyard or their garden and modernising a bathroom or kitchen. Some are also looking to renovate outdoor areas, including decking or entertainment space.

“Upgrades to the property like landscaping the backyard or garden, and modernising the kitchen or bathroom topped the list for renovators,” Mr Hughes flagged.

“DIY projects have also been popular during the pandemic, which can be a cost-effective way for home owners to make simple improvements to their living space,” he continued. 

Apart from more comfortable living spaces, a significant number of home owners are also looking to profit from a renovation project.  

According to Westpac, nine in 10 (89 per cent) agree that renovations are good for increasing the value of their property, and almost a quarter (23 per cent) are undergoing renovations in preparation of a future sale. 

Further, four in 10 (43 per cent) are also planning to either sell or rent out their home once restrictions have eased.  

Where you live has an impact

Westpac found that home owners in NSW/ACT, Western Australia and Victoria are more likely to be thinking about renovating in the next five years, with renovators in NSW planning to spend the most on renovations, at around $93,427, on average. 

On the other end of the spectrum, Western Australians expect to spend just $41,458 on changes.

The research also found that Queenslanders are more likely to be renovating in preparation to sell, while Victorians lean towards renovating to accommodate working from home.

After extended time in lockdown, Victorians are also the most likely to be considering alterations that would make life at home for them and their family more comfortable because of restrictions.

The popularity in renovating existing properties has also been driven by government grants, such as the federal government’s HomeBuilder scheme (which was recently extended) and similar state-based grants, which provide borrowers with cash grants to renovate.

[Related: New loan commitments reach record high: ABS]