Big-spending homeowners hammering the renovations
Home renovators are spending more and taking on a greater number of projects, with half of all homeowners planning to upgrade their property this year.
Home renovation activity and spend have reached the highest rates reported since 2019.
Nearly half of homeowners renovated their homes in 2021 (48 percent), up from 44 percent in 2020.
Homeowners recorded a significant 43 percent jump in median renovation spend at $30,000 from $21,000 in 2020. This growth can be attributed to homeowners with higher budget projects (the top 10 percent of spend) increasing their investment from $150,000 in 2020 to $230,000 in 2021.
The findings were revealed in the annual Houzz & Home survey of more than 2,200 Australian respondents from home renovation and design platform Houzz.
Home renovation activity continues into 2022, with nearly half of homeowners planning to renovate (49 percent) and nearly two-fifths planning to decorate (39 percent) this year.
For the first time since 2019, homeowners’ planned spend has increased to $25,000 for 2022 versus $15,000, a 67 percent jump. Homeowners with higher-budget renovations (the top 10 percent of spend) are planning to spend $138,000 on projects in 2022.
“Homeowners are clearly committed to investing in their homes despite labour shortages and heightened product and material costs driven by supply chain disruptions, and are exploring diverse funding sources.
This is especially pronounced among recent homebuyers and younger couples, who rely heavily on cash from previous home sales to fund their projects and spend significantly more than the national median,” said Tony Been, Managing Director of Houzz Australia.
How Long Does a Renovation Project Take Us?
Frequency of project planning and construction lengths in months as reported by homeowners who renovated their primary homes in 2021.
Recent homebuyers*, who accounted for 10 percent of renovating homeowners in 2021, spent more than the national median ($40,000), surpassing short-term** and long-term*** homeowners ($35,000 and $25,000, respectively).
Recent homebuyers with higher budget projects (the top 10 percent of spend) invested $250,000, compared to $240,000 invested by short-term homeowners and $200,000 for long-term homeowners. This is likely attributed to the larger scope projects they undertake, averaging three to four rooms, as well as home systems, such as electrical and plumbing.
Cash from savings remains the most significant source for funding renovation projects (82 percent), however, homeowners financing renovation projects with credit cards gained four percentage points (17 percent).
Savings and credit cards hold their ground as the leading forms of payment regardless of homeownership tenure. Recent homebuyers and short-term homeowners were more likely to rely on cash from previous home sales (47 and 22 percent, respectively), whereas long term homeowners had more access to cash through refinancing in 2021 (11 percent).
Demand grows for home professionals
Homeowners sought help from professionals for their renovations in 2021 (94 percent) more often than in the year prior (91 percent), relying most heavily on the expertise of specialty service providers such as electricians (68 percent) and plumbers (54 percent) for their projects.
That said, builders (24 percent) and architects (10 percent) were the most hired professionals in construction and design-related services, and saw a significant jump in 2021 compared with 2020 (19 percent and six percent, respectively).
With recent homebuyers tackling more projects than their peers, it’s no surprise that the majority were most likely to hire professional help (100 percent), compared with short-term and long-term homeowners (93 percent each).
Switching up interiors
Investments in interior rooms remained the priority for seven in ten renovating homeowners in 2021 (70 percent).
Kitchens are both the most popular interior room to be upgraded and the room that commanded the highest spend at $20,000.
Interior rooms that saw the most dramatic increase in popularity from the previous year included guest bedrooms (24 percent), guest bathrooms (23 percent), an entry or mudroom (17 percent) and wardrobes (16 percent).
Securing the grounds
There has been an increase in home security upgrades among renovating homeowners in the past year.
In fact, outdoor security cameras (17 percent) were the second most frequently purchased upgrade behind outdoor lighting (29 percent). Home security system upgrades were most popular among recent homebuyers, followed by short-term homeowners and long-term homeowners (20, 12 and 12 percent, respectively).
* Recent homebuyers are those who have not yet moved into their home or moved in less than a year ago.
** Short-term owners refers to homeowners who moved into their home between one and five years ago.
*** Long-term owners refers to homeowners who moved into their home six or more years ago.