Australia is in the midst of a home-improvement frenzy, with the number of people undertaking major home renovations hitting an all-time high.
Driven by historically low interest rates and rapidly rising house and apartment prices, the nation’s suburbs are alive with the sound of drills and hammers.
“If you look at the latest figures for 2019, then the number of approvals for major home renovations is at the highest level we’ve ever seen,” said Shane Garrett, the chief economist at Master Builders Australia.
“And, until the last little while at the beginning of 2020, I think the activity has only been increasing,” according to Domain.
Rising prices mean that some home owners are eager to renovate and sell for more money than they paid, while others are more eager to improve their homes so they don’t have to move and pay higher prices.
The Reserve Bank’s decision to cut rates to yet another low, of 0.25 per cent, means it’s cheaper than ever before to borrow money to make improvements.
No one quite knows how coronavirus will affect the renovation craze but it could be that, with more time spent at home, people will be eager to undertake fresh projects.
The economic slowdown, however, could mean they’ll be more nervous about borrowing funds, despite the low interest rates, and there’ve been reports of shortages of materials traditionally imported from China.
“Another factor driving this movement is that more detached houses were built from the mid-1980s in Australia than at any time before, and now more 30 to 35-year-olds are moving into these as older people move out, and we see this group doing a disproportionate amount of renovation work.
“We reckon this will help drag the number of renovation sites up even higher, although we’re now in unprecedented circumstances. But we’re hoping the government will offer a stimulus to help medium-sized renovations continue,” according to Domain.
Originally seen on Domain.