Alterations & additions
Major renovations work ballooned from early 2020 from $200 million to $600 million per month on the back of the government's massive HomeBuilder stimulus package.
I guess, if nothing else, this shows just how powerful targeted fiscal stimulus can be!
Things seemed to be easing in 2023 as mortgage rates increased, and as many of the pandemic period renovation projects finished, yet by November we were back to near-record monthly highs for the financing of renovations.
What gives?
Firstly, it's worth noting at least a third of the increase in the value of renovations has been due to rising costs, rather than only volumes.
And secondly, certainly the chronic shortage of housing in south-east Queensland has led to the construction of more granny flats.
Thirdly, low levels of housing stock for sale combined with high transaction costs/stamp duty rates have led many aspirational homeowners to stay put and renovate, rather than trade up.
And fourth, perhaps some of the more creative mortgage brokers are even using 'renovations' as an excuse to cash out for refinancing.
Noise, or new uptrend?
But is this latest data merely noise or a blip, or is it the resumption of another genuine boom in renovations work?
Smoothing out the recent data suggests that Sydney and New South Wales homeowners have driven the recent rebound, with renovation financing running at around double their pre-pandemic levels.
But the largest percentage uplifts in the value of renovations lending since the pre-pandemic days have been seen in Queensland and Western Australia, more than tripling respectively.
It's boom-time in the resources states, driven in part by very rapid population growth.
A word of warning for would-be renovators: you should probably plan for budget overruns, heavy pricing for materials and trades, and potentially council approval delays to boot.
Also, consider using a buyer's agent if you're looking to buy in the current exceptionally tight market conditions.
---
P.S. Whenever you’re ready…here are 5 ways I can help you manage your own money and go next level wealth:
- Boom or Bust – 20 minute online workshop for investors
Register for my next free online training - Boom or Bust? How to change your investment plan - book in here
You also download a free copy of my e-book The Only 6 Ways to Become Wealthy here.
2. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property investment purchases here.
Get in contact with us today if strategic property investment is your thing.
3. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is one of Australia's biggest business podcasts.
And our enormously popular Low Rates High Returns Show also remains available on Spotify.
4. Subscribe for my free daily blog
Subscribe for my free daily blog with well over 3.5 million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 13,500 followers.
By the way, I'm a 7-times published author on finance and investing, so you can check out some of my books here.
5. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
