A new survey has revealed baby boomers accounted for nearly half of renovating homeowners in 2019.
The annual Houzz & Home survey of more than 4,500 households found Gen Xers and Millennials followed boomers in renovation activity, making up 39% and 14% of home renovators respectively.
The survey found the median spend for home renovations stabilised at $20,000 in 2019, while at the higher end of the market, 10% of homeowners spent $150,000 or more on their renovations.
Almost half of respondents reported a renovating project last year, tackling nearly three interior rooms on average.
Conducted in early 2020, planned activity for this year remains consistent with last year, with the impact of COVID-19 and the government's HomeBuilder scheme yet to be seen.
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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Marine Sargsyan, Houzz senior economist, said renovation spend and activity had stabilised, with boomers continuing to drive much of the growth in the area.
“Following significant growth in home renovation activity over the past few years, we’re seeing the market settle somewhat in terms of activity,” Ms Sargsyan said.
“That said, project scope and spend have remained stable and we’re seeing Baby Boomers continue to bring consistency to the market as they pursue projects that will allow them to age in place.”
Gen Xers reported the highest median renovation spend at $20,000, followed closely by Baby Boomers at $18,500.
Kitchens had the highest median spend at $15,000, down on previous years, followed by master bedrooms ($13,000) and guest bathrooms ($10,000), both up on previous years.
COVID impact on home improvement
The survey was fielded prior to the declaration of the COVID-19 pandemic in February and March of this year, and at that time nearly half of homeowners surveyed planned to continue or start renovations this year.
But Ms Sargsyan said the majority of homeowners had been able to go ahead with plans, and those holding off meant there would be an influx of work in the future.
“Subsequent surveys have shown that four in five homeowners who were in the midst of a project at the start of the pandemic were able to continue with renovations," she said.
"That said, some homeowners have opted to delay certain elective renovations due to implications related to social contact, labour and material availability and personal discretionary spending.
"Deferred maintenance will accrue during this period, setting the stage for a renewed burst of activity following the pandemic."
Planning takes time
Preparing for a renovation in 2019 on average took longer than the renovation itself.
While construction took between two and six months on average for different types of projects, the planning phase took roughly twice as long.
Kitchens required almost a year of planning, while bathrooms took around nine months, and kitchens and living rooms continued to be the most popular rooms to renovate.
One in ten homeowners added or upgraded a home office in 2019, a number which is likely to rise this year given the shift to working from home.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
- If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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