Gen Y leads surge in home renovations
18 April, 2017
- Renovating is the highest housing-related priority for nearly one third (32%) of home owners considering a house-related activity in the next five years
- Gen Y home owners are the most likely to be currently renovating or considering renovating their home (23% and 46% respectively)
- Home owners who are getting married or having a baby are the most likely to be considering renovating
Three quarters (76%) of Australian home owners1 are on their home renovating journey, up 12 per cent since 2015, according to Westpac’s Home Ownership Report.
Of those, almost half (47%) are considering renovating their home, one in five (20%) are currently renovating, and 70% have undertaken renovations in the past.
The nationwide study commissioned by Westpac, found that renovating is now the highest priority for nearly one third (32%) of home owners who are considering a house-related activity in the next five years.
Gen Y was found to be the generation of home owners most likely to be considering renovating in the future (46%), compared to Gen X (39%) and then Baby Boomers (31%).
Chris Screen, Westpac Group Head of Home Ownership, said the competitive housing market has inspired a surge in home renovations.
“With rising property prices and intense competition for property in metro areas, many home owners are looking to renovate their existing property rather than sell and risk losing their position in the market,” said Mr. Screen.
A recent Westpac Herron Todd White Property Report2 on renovations found that Sydney’s prestige market is experiencing an upsurge in renovations with strong market conditions leading homeowners to believe there may be an increased potential for capital gains on resale. While in Brisbane, the report found that home owners tend to renovate to accommodate their growing families, while still living in the areas they love.
“In the current market, many renovators are taking advantage of increased home equity to upgrade their homes to suit their needs. If planning to renovate, home owners should take steps to find out the estimated available equity in their property, to help with the budgeting and planning,” advised Mr. Screen.
Westpac’s online property dashboard Westpac Wonder gives customers a picture of their property, including its current estimated value, available equity and the information required to enable customers to apply for extra funds for renovations.
Generational differences amongst current renovators were uncovered by Westpac’s Home Ownership Report, with almost one in four (23%) Gen Y home owners currently undertaking renovations on their home, followed by Gen X (16%) and then Baby Boomers (13%).
When asked why they renovate, Australian home owners who had identified renovating as their highest priority in the next five years said the main reasons would be to have a nicer home (74%) and to lower home maintenance and/or upkeep (30%). The Westpac Herron Todd White report noted that home owners may also be inspired to renovate by the popularity of renovation shows on TV. Life stages also play a role in planning renovations, with home owners who are getting married3 (52%) or having a baby (51%) most likely to be considering renovating.
The growing popularity of renovations, combined with a tough housing market has most likely played a role in the drop in Australian home owners who classify ‘move in ready’ homes as an essential core feature of a home (34% compared to 42% in 2015).
“In such a competitive housing landscape, it isn’t surprising that Australians’ property expectations are shifting and more home owners are choosing to buy and renovate later, in order to get a foot on the property ladder,” said Mr Screen.
Tips for prospective renovators:
- Ask yourself why: Are you renovating to create more space for your family, to update the appearance or functionality of your home, or to add value? The reason you are renovating will influence your choices throughout the renovation process.
- Research: If you are renovating to add value to your property, research the area thoroughly to avoid overcapitalising on your renovations and to understand what buyers in the area are looking for.
- Budget: Set your budget and begin sourcing quotes to get a realistic idea of how much the work will cost and what you can achieve within your budget.
- Explore your property potential: Eligible Westpac customers can use Westpac Wonder to discover their property potential, calculate estimated available equity, and apply for extra funds with a response generally available in minutes.
1Home owners: those who own and occupy their current home. Results are weighted to the data from the findings in 2015 Westpac Home Ownership Report.
2Study conducted by Herron Todd White in October 2016. The Westpac Herron Todd White Property Report provides a first-hand look at how Australia's residential property market is performing state by state. Herron Todd White is Australia’s largest independent property valuation and advisory group.
3Intending to be married in the next two years / intending to have a baby in the next two years
About the Westpac 2016 Home Ownership Report
The research was commissioned by Westpac and conducted by Lonergan Research in accordance with the ISO 20252 standard. Lonergan Research surveyed 1,119 Home Owners and Intending First Home Buyers. Surveys were distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted online amongst members of a permission-based panel, between 2nd September and 9th September 2016. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.