New data from the 2021 'Houzz & Home' survey of more than 2,000 Australian respondents shows that home renovation spending has grown 5% in the last year to a median of $21,000.
Meanwhile, payment through credit cards fell from 20 to 13% between 2019 and 2020 with cash remaining king, making up 81% of home renovation payments.
Why the rise in renovations?
Managing Director of Houzz Australia-New Zealand, Tony Been, said that once the initial concern from the pandemic passed, homeowners had the time and financial means to start their delayed projects.
"This pent-up demand, along with long-standing market fundamentals empower homeowners to continue investing in their current homes," Mr Been said.
With the pandemic limiting homeowners to their residence, the share saying they had been wanting to pursue home renovations all along but finally had the time, saw an increase by four percentage points in 2020.
The survey also found that those homeowners who reported being able to, at last, finance their long-awaited renovations rose from 34% in 2018 to 35% in 2020.
Another renovation trigger was that over a quarter of homeowners stated it was more affordable to renovate instead of moving home to find the right fit.
This growth is expected to continue as 48% of respondents said they plan to renovate in 2021.
Millennials step up their spending
The median renovation spend for Millennials has jumped from $19,000 in 2019 to $22,000 in 2020.
This means the Millennials have overtaken Gen Xers' median spend of $20,000, which was historically higher.
Despite this, Gen Xers' top 10% of project spend at $200,000 surpassed that of the Millennials' at $79,000.
Baby Boomers still have the highest median spend at $22,600.
The Houzz & Home survey reported that as Millennials don’t have the cash reserves from selling previous homes that the older generations do, they are more likely to use credit cards.
What are the main areas being renovated?
The survey found that renovations to homeowners' kitchens were most popular with 54% of respondents changing the layout of their kitchen.
Forty per cent of respondents improved their plumbing, electrical or HVAC systems.
Interior project remains the most popular however at 72%, however more than half of homeowners also indicated that they had done work to their outside areas.
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