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Why Now Is The Time To Renovate
●June 16, 2021●5 minute read
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Currently, more people are renovating their homes than ever before. A survey conducted by RateCity found that out of 1,000 Aussies surveyed, 37% were currently renovating or planning to renovate their homes in 2021.
In December 2020, there was a total of $2,544.6 million worth of recorded home renovations completed.
Interestingly, the Australian Bureau of Statistics (ABS) data revealed that there was a $980.5 million increase in total money spent on home renovations from September 2020 to December 2020. More evidently, $1,274.9 million more has been spent in December 2020 than December 2019.
So, why is everyone renovating now? Let’s dive into everything you need to know about home renovations, what your renovation options are, and why now might be the time for you to finally make those home changes you’ve been waiting to do.
What are home renovations?
In a nutshell, renovating your home is the process of improving existing or adding additional features to your home for the purpose of improved functionality and/or appearance.
Home renovations can range from a fresh paint job all the way to a complete home renovation. You could choose to focus on sprucing up a few rooms, like the kitchen, bathroom, or bedroom. Alternatively, you can do a complete home renovation in which you essentially re-do the entire home.
What renovations are the most common?
The Blue Space conducted a survey that revealed that kitchens are the most popular home renovation, with 35% of people planning to renovate their kitchen with an average spend of $25,000.
Next, 33% of people said that they were planning to renovate a bathroom with an average cost of $18,000.
Following this, 26% of people planned to renovate their bedroom, 25% to renovate their living room and 25% to renovate their alfresco area.
When are renovations worth doing?
According to Yard’s CEO, Toni Mladenova, it depends on whether you are going to renovate to sell or renovate an investment property.
Typically, people that are renovating to sell focus on key rooms, such as the kitchen and bathroom, as these are the most important to prospective buyers. On the other hand, people that plan to rent out their property tend to focus on practical, cosmetic projects rather than structural renovations.
What are the benefits of home renovations?
Renovations can be pretty costly, so it’s important to know whether you’ll get the value that you put in back out of it. There are a few key benefits of home improvements: it can increase the value of your property, improve your quality of life, and make your home less expensive to maintain.
Increased home value
In most instances, completing home renovations will increase the value of your home. For older homes that have out-dated features and functionality, completing home renovations can end up generating a greater return on your investment.
Improved quality of life
Your home is your safe haven. If living with broken, out-dated, or unfitting home features is undesirable, it can be worth spending the money to change and/or improve these things for your own wellbeing.
Less expensive to maintain
Sometimes, paying to renovate aspects of your home can make it cheaper to maintain in the long run. For example, if you have an old heating system that costs a lot of money to run, it can end up being cheaper to replace the system now to save on costly bills in the long term.
Why is now the time to renovate?
According to professionals, lifestyle changes brought about by the COVID-19 pandemic has been a big influence for many people to choose to renovate their homes. Particularly in consideration of the recent lockdowns, many families generated more savings than previous years.
According to APRA, Australians have deposited an extra $124.14 billion into their bank accounts.
A survey by RateCity found that 22% of people that were saving for an overseas holiday used their money to complete home renovations instead. In addition, more people are taking out renovation loans.
A total of $3.12 billion were taken out in loans for alterations, additions, and repairs, according to ABS data.
Tips for a successful renovation project
Making alterations to your home might sound simple, but it can be a really big project depending on the scale of the changes planned. Here are some of our tips for a smooth and successful renovation project:
Make a clear and tangible plan of what you plan to renovate, when you plan on doing it, and what exactly you will be doing. If you have specific products you want to use in mind, pick them out early to minimise delays. By having a structure in place, you can ensure that you can manage your budget, timeframe, and reduce stress.
Make a budget
As we’ve mentioned before, renovations are expensive. Little costs can add up without realising; building materials, labour costs, permits, and decorations can lead to a massive expense at the end of the day. Better Homes and Gardens recommends that you estimate the costs of all of your expected renovations, and reserve at least 10% for unexpected costs.
Understand the project
Renovations can be extremely exciting, rewarding, and sometimes fun! However, it’s a pretty big commitment, in terms of both time and money. It’s important to have clear goals, plans, and to understand all aspects of your planned renovations. If you’re planning on hiring help, understand the contract and what is expected of them. If you’re planning to do things yourself, understand what you’re doing. Ultimately, it’s important to know the commitment you are making, and how you will execute all of your plans.
Consider the best finance options
Renovations can be expensive. It’s estimated that most people can spend between $60,000 to $70,000 on their home renovations. Consider the best way for you to finance this project. There are three main options: using your savings, taking out a renovation loan, or withdrawing equity from your home. Investigate all of your options to ensure that the option you choose is most suited to you.
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Written by Rachel Horan
Rachel Horan is a Content Writer for Jacaranda Finance. Rachel has previously produced content for Brisbane City Council, Black & White Cabs, and Clubs Queensland. She has a Bachelor of Mass Communication with Distinction from the Queensland University of Technology.