RENO REVIVAL: How much we're spending our homes
ONE in three Aussie homeowners have jumped on the renovation bandwagon as cooling property prices, moving costs and low interest rates encourage owner-occupiers to stay put.
New research shows more than three million homes have had a makeover, with homeowners spending an average of $17,000 on their kitchens - more than on any other room in the house.
According to a survey of more than 2000 people by comparison website finder.com.au, the kitchen is the most valuable room in the house.
But it's the swimming pool that hurt the hip pocket the most, with owners splashing out more than $21,000 on the backyard addition.
The majority of people surveyed (71 per cent) dipped into their savings to fund their renovations, while one in eight used the equity in their mortgage.
The remaining 1 per cent hit up family and friends to borrow the money.
ME Bank head of home loans Patrick Nolan said the bank noticed a substantial increase in renovation loan applications in 2017 - a trend that was likely to continue this year as it became more expensive to move.
"Upgraders are avoiding exorbitant moving costs such as stamp duty," he said.
"We're seeing some more top-ups as people take advantage of lower interest rates and leverage the extra equity in their property in order to finance renovations."
CommSec senior economist Ryan Felsman agreed that rather than trading up and incurring stamp duty costs, homeowners may be encouraged to renovate Australia's ageing stock of houses and units.
Cooling home prices may be another reason for owner-occupiers to stay put.
Real Estate Buyers Agents Association of Australia president Rich Harvey said buyers should to look at renovations and value adding strategies to manufacture equity rather than wait for long-term capital growth as prices softened and flatlined in several key markets in 2018.
According to the Housing Industry Association, homes from the '1980s club' will become increasingly ripe for renovation work in the coming years.
HOW MUCH IS SPENT ON RENOVATING?
Room Average cost
New deck $12,392
New pool $21,429