Australians spending on home renovation despite economic slowdown

It may come as a surprise that despite signs of a global and national economic slowdown, Australians have continued to spend on home renovations, even if for varying reasons.

According to the 2019 Houzz & Home Australia Study, the largest survey of residential renovation activity with more than 8,800 respondents in Australia, kitchens were the most popular room to renovate (26% of the respondents) — the average spend grew by 16% to approximately $20,000 in the year. Others valued living rooms (23%), bedrooms, bathrooms and laundries (all at 17% each) as their preferred space to refurbish.

Interestingly, half of the homeowners on Houzz were renovating an average of three rooms per project.

Baby boomers (ages 55-74) and Gen Xers (ages 40-54) combined represented over three quarters of the renovation activities (79%), spending an average of $21,000 and $23,000, respectively.

Wanting to stay in their current homes and increase return on investment were the two key factors driving them to make changes to their homes. Millennials, on the other hand, carried out refurbishments because it was more affordable than moving.

“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,” says Nino Sitchinava, Houzz’s principal economist.

“Pent up demand continues to drive renovation activity, while spend on discretionary projects such as kitchens continues to grow, signaling strength in consumer confidence.”

Other highlights from the report include:

Funding for renovation projects
The majority of homeowners paid for renovations using cash from savings (76%), followed at a distance by credit cards (19%) and cash from home mortgage refinance (13%). Expectedly, reliance on credit cards was 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%), with electricians, plumbers and carpenters in greatest demand (62%, 51% and 40%, respectively). Baby boomers were more likely to hire professional help than millennials by 10% (93% versus 83%).

Making “smart” decisions
Over one in 10 homeowners prioritised smart technology during home renovations (12%), purchasing products like home assistants, streaming media players and security cameras. Baby boomers were more likely than Gen Xers and millennials to rank smart technology as a higher priority (15% versus 10% and 9%, respectively). However, millennials are still incorporating the most home assistants (22%), compared with one in 10 baby boomers (11%).

Improving energy efficiency
While improving the design and functionality of a home were the top priorities during renovations, over two in five homeowners prioritise energy efficiency (43%). This was particularly important for baby boomers when compared to Gen Xers and millennials (50% versus 39% and 36%, respectively).

Home decor
Nearly two-thirds of renovating homeowners in 2018 also decorated or furnished their home the same year (65%). Millennials were significantly more likely to decorate following home renovations than baby boomers (73% versus 60%).

From MPA

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