Home Owners Saving for Renovations
Most home owners are prioritising saving for renovations over other household upgrades, according to a survey by leading mortgage broker Loan Market.
Loan Market Corporate Spokesman Paul Smith said a survey of the company’s home loan customers found 37 per cent said the main household item they were saving for this year was a major renovation.
Mr Smith said that 23 per cent of the 532 respondents were saving to landscape their property and 30 per cent of Gen-Y respondents said they were saving to buy new appliances or furniture.
“In most cases, the most common initiative you can make to increase your property value and create your dream home is to undertake a renovation. However depending on the size, renovations can be costly and require significant planning,” Mr Smith said.
Mr Smith said that many lenders looked upon home owners who were borrowing for renovation purposes favourably because they were investing in their home and adding to its value.
“It’s often worthwhile negotiating with your lender, an additional discount or incentive to refinance your loan for the purpose of renovation because you’ll be adding value to the underlying asset and making a significant long-term investment in the property.
Mr Smith said that for Gen-Y’s, it was not surprising to see that they had higher interest in property renovation than most home owners as they commonly purchase with potential for scope . Additionally he said that Gen-Y had higher interest in purchasing new appliances or furniture over landscaping their properties.
“For Gen-Y buyers, they’re often buying smaller units which have undersized or no backyards and are much easier to renovate because of the size of the unit. It can be easier to tackle DIY projects in a smaller space.”
Additionally many first time buyers, who purchase with the intent of living in the unit for a short 6-12 month period, often undertake renovation projects to not only add value to the property but increase the likelihood of finding renters and maximizing returns.
Mr Smith said that the popularity of home renovation shows such as The Block were heightening and encouraging many home owners enthusiasm to upgrade certain areas of their home.
“For many home owners purchasing the property is only part of their goal, putting a personal touch on the property by renovating a certain room or area, is essential to truly building a dream home.”
What household items are you saving for this year?
All Gen Y
a) A major renovation 37% 38%
b) New appliances or furniture 18% 33%
c) Landscaping 23% 15%
d) I’m saving for retirement. 22% 14%