In a remarkable display of affection for their homes, Australians are pouring a staggering $1 billion into home improvement projects each month, with spending on the rise. Despite belt-tightening measures in other areas, the allure of renovations remains strong.
Recent data from the ABS (Australian Bureau of Statistics) indicates that in May 2023 alone, Aussies spent a whopping $1,044 million on home renovations, marking a significant 4.3% increase from the previous month.
The surge in home renovation endeavors may owe partly to the surge in popularity of home improvement shows during the pandemic, which have undoubtedly inspired homeowners to revamp their spaces. However, there is another essential factor at play – the cost-effectiveness of renovating one’s existing property compared to selling and relocating elsewhere.
When considering home improvements, it is crucial to assess the most popular renovation targets. According to the 2022 Houzz & Home Report, kitchens take the lead, accounting for almost one in four (23%) of all renovations. Not far behind are living rooms, bathrooms, and bedrooms, each comprising 20% of renovation projects.
Naturally, understanding the potential costs of a renovation is a critical step in the planning process. For minor projects, do-it-yourself endeavors may be affordable. However, when dealing with structural changes or specialized work, consulting professionals (tradie) becomes necessary, and costs can start to escalate.
To provide some insight, the latest Archicentre Cost Guide outlines typical expenses for popular home improvements. For instance:
Polishing timber floorboards may cost $75 to $120 per square meter.
Interior painting could come to around $35 per square meter.
Extending your home might reach up to $4,600.
A new kitchen (excluding appliances) may set you back up to $48,000.
While home improvements may require significant financial investment, they can prove to be valuable. Apart from enhancing your lifestyle, well-executed renovations can boost your property’s value. Moreover, some improvements can lead to cost savings – for instance, installing rooftop solar panels can lower utility bills, putting money back into your pocket.
Determining how to fund your renovation project is a crucial part of the planning process. It’s vital to ensure that the chosen approach aligns with your financial capabilities to avoid any interruptions midway through the project. For smaller projects, cash savings or personal loans with shorter terms can be suitable options to keep interest costs in check.
For more substantial renovations, a home loan top-up might be a convenient solution, but it generally hinges on having sufficient home equity to qualify for additional funds. On the higher end of the scale, a dedicated renovation or construction loan offers another avenue. Such loans provide funds in stages as the project progresses, and you typically only pay interest on the drawn-down amount, making it a manageable cost.
If a renovation project features on your bucket list, reaching out to professionals for financial guidance is essential. Discovering the available options to fund your project and understanding the associated costs can set you on the right path to turn your dream renovation into reality.
Please feel free to contact us to explore funding possibilities for your renovation project and gain insights into the overall costs involved. We are here to help you make your renovation aspirations a reality.