Why so many homeowners will renovate in 2022

After Australian homeowners had a record renovating year in 2021, a survey out of the U.S. shows there's no slowdown in 2022. Around half of homeowners expect to renovate their homes in the coming year.

Residz Team 6/29/2022 4:05:01 AM 3 min read

Australians love to renovate, never more so than during a pandemic.

Australian Bureau of Statistics figures found renovators spent $12.3 billion in 2021 renovating their homes, up 33% on 2020 and more than in any other recorded year. (ABC)

Now, a survey out of the U.S. shows around half of homeowners expect to renovate their homes in the coming year.

In results probably similar for the Australian market, the Regions Bank survey found that younger homeowners showed the most enthusiasm for taking on a home renovation, with 70% between the ages of 18 and 34 surveyed more likely to make updates to their existing home.

By contrast , 52% of those ages 35-54, and 40% of those ages 55 and over were keen to renovate.

Although supply issues and rising costs mean it’s getting almost too costly to buy, sell, or renovate, renovating still edges ahead as cheaper than selling and buying a new home. It’s also a great way to realise the potential of what you own. Renovating can give you some of the home features on the wish lists of the rich and famous. They include wellness areas (such as yoga rooms and saunas), outdoor rooms, and smart home technology in the kitchen.

So, how much should you spend? Soho suggests the general rule of thumb is to spend no more than 5% to 10% of the total value of the property on renovations, but some experts suggest up to 20% is fine. It depends on whether the reno is cosmetic or structural, so begin with these 5 starting points from a project manager.

Many people renovate their homes to allow them to stay where they are. Others do it to add value. According to Money Magazine, the items that add the MOST value include:

A home office
An outdoor space that delivers an “experience” (ie. a fire pit)
A modernised bathroom
An updated kitchen with a butler’s pantry
Wine cellar and/or media room

Items that don’t generally add value, according to OpenAgent, are:

A backyard pool (unless you live in a year-round warm climate, within a “school belt”, and your place is “higher end” - where a pool is considered standard).
Custom features and luxury fittings.
A budget-blowing kitchen and bathroom. More spend doesn’t necessarily translate into adding more value.
Coloured feature walls, bright tiles, or loud flooring.
Air conditioning (unless you sell during a hot summer or heatwave)
Bad DIY work
Wine cellars, cinema rooms (in contrast to Money Magazine’s advice)

Neither of the two mention landscaping, but Urban’s Luke Carlino says it’s one of the best things a homeowner can do to add value (outside of the house).

He cites Clemson University Professor Mark S. Henry’s research paper claims that even a small increase in the quality of your home's landscaping could increase the resale value of a property by around 7%.

But, he says to be discerning about where you spend your money.

“A landscaped patio can raise the value of a home as it melds the idea of outdoors with the indoor,” he says. Outdoor lighting is also a winner, however a pool or tennis court are not items to prioritise.

“Water (not a pool) is an appealing feature to create a calming atmosphere, [so] consider a fountain or small pond,” says Luke Carlino.

With renovations complete, you can then decide whether you want to sell your home. Andrew Winter, host of Selling Houses Australia, says you can save the costly hassle of selling up by putting a dream price on your place and waiting for the perfect result.

“Residz allows property owners to research and understand what their dream price is, and to promote that to potential buyers,” he says.

Or, you can sit back and enjoy your updated property, and wait for the property market to pick up before making any decision.

Photo by henry perks on Unsplash