Where Homeowners Are Spending $1 Billion a Month
Belts may be tightening but not for renovators. The latest figures from the ABS show Australians spent $1,044 million on home renovations in May 2023 – that’s up 4.3% on the previous month.
Our passion for renovating may stem from binge-watching home improvement shows throughout the pandemic, but there could be another factor at play.
It can be a lot cheaper to renovate your home than sell up and buy elsewhere.
If you are thinking of a few home improvements, here is what to consider.
What Are the Most Popular Renovations?
The 2022 Houzz & Home Report reveals which rooms Australians have targeted for home improvements. The kitchen accounts for almost one in four (23%) renovations with other top contenders being the living room, bathroom, and bedroom makeovers (each 20%).
How Much Will a Renovation Cost?
A key step in planning a renovation is crunching the numbers to know the likely cost. This is a must-do before you start collecting colour charts and carpet samples.
Smaller renovations can be affordable do-it-yourself projects. For any structural or specialist work it pays to call in the tradies, and that’s when the cost can start to escalate.
The latest Archicentre Cost Guide sets out typical costs for popular home improvements. As a guide, you can expect to pay:
- $75-$120 per square metre to polish timer floorboards
- Up to $35 per square metre for interior painting
- Up to $4,600 for an extension
- Up to $48,000 for a new kitchen (excluding appliances)
While home improvements may not come cheap, quality renovations can boost your lifestyle and your home’s value. They can also be a money-saver – ‘green’ improvements such as installing rooftop solar panels can put money back in your pocket through lower utility bills.
How to Pay for Renovations
Working out how you will pay for a renovation is an essential part of the planning process. You need to be sure that you can afford the improvements and avoid the prospect of running out of funds mid-way through a project.
Using cash savings or a personal loan may be suitable for smaller projects – the shorter term of a personal loan (usually less than five years) can help keep a lid on the interest cost.
For more expensive projects, a home loan top-up can be a quick and easy solution, though it can hinge on you having sufficient home equity to quality for additional funds.
At the top end of the scale, a dedicated renovation or a construction loan is another option. These can work by drip-feeding funds as different stages of the project are ticked off. You generally only pay interest on funds drawn down, making the cost more manageable.
Frequently Asked Questions
How Much Are Australians Spending on Home Renovations?
According to the latest figures from the ABS, Australians spent $1,044 million on home renovations in May 2023, marking a 4.3% increase from the previous month.
What Are the Most Popular Types of Home Renovations?
The 2022 Houzz & Home Report reveals that the kitchen is the most popular room for renovations, accounting for almost one in four (23%) projects. Other top contenders include the living room, bathroom, and bedroom makeovers, each accounting for 20% of renovations.
How Can I Estimate the Cost of a Renovation?
The Archicentre Cost Guide provides typical costs for popular home improvements. For example, polishing timber floorboards can cost between $75-$120 per square meter, and a new kitchen can cost up to $48,000, excluding appliances.
What Are Some Financing Options for Home Renovations?
Financing options can range from using cash savings or a personal loan for smaller projects to a home loan top-up or a dedicated renovation loan for more expensive projects.
Can Home Renovations Increase the Value of My Home?
While home improvements may not come cheap, quality renovations can boost both your lifestyle and your home's value. 'Green' improvements like installing rooftop solar panels can also result in lower utility bills.
Get Started on Your Renovation
If a renovation is on your bucket list, call us to discover the options available to fund your project and the costs involved.
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.