Housing Renovations

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GUEST OBSERVER
The Housing Industry Association has released the latest edition of Renovations Roundup, the only regular review of Australia’s $30 billion home renovations market. 
Australia’s home renovations market is very much in recovery mode with 2015 marking the second consecutive year of growth. This followed a pretty nasty slump during the early years of the decade.
The recovery in renovations activity is being supported by the environment of remarkably low interest rates and very strong dwelling price growth in key markets.
 In this context, many homeowners have decided to shelve plans to move house and instead conduct major renovations work on their existing homes. The large pool of available home equity has made this possible.
However, the pace is growth is being held back by the weakness of earnings growth in the economy and the fragile condition of consumer sentiment.
The importance of home renovations activity is often underestimated – it accounted for about 35 per cent of total residential construction during 2015. With new home building set to decline over the coming years, the expansion of the renovations market means that its importance will only increase. 
The revival in renovations activity will provide a welcome offset to the more challenging situation emerging on the new home building side of the industry.
The Renovations Roundup projects that renovations activity will increase by 2.5 percent this year with growth of 1.7 percent forecast for 2017. HIA projects that activity will grow by 2.8 percent in 2018 followed by a 2.0 percent increase in 2019, bringing the total volume of renovations activity to $33.30 billion. 
Shane Garrett is senior economist for HIA and can be contacted <a href="https://hia.com.au/en/BusinessInfo/economicInfo/EcoGroup.aspx" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Renovations set to take up the mantle: HIA's Shane Garrett

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Homeowners in Australia are active home upgraders, according to the 2016 Houzz &amp; Home report.
Houzz, the website platform for home renovation and design, undertook a study, of almost 14,000 respondents in Australia and over 229,000 respondents globally.
It revealed that more than half renovated their homes in 2015 (56 percent), with a similar portion reporting their plans to renovate in 2016 (49 percent).
Almost half of renovating Australian homeowners opt to take on a renovation instead of buying an already “perfect” home due to their desire to stay in their current home or lot (46 percent). A third choose the renovation route in order to remain in their current neighbourhood (33 percent), with 29 percent choosing renovation because it was a more affordable option.
For Millennials, financial considerations are more top of mind – over a third cite affordability as the top reason for renovating versus buying (36%). When it comes to the triggers behind taking on a renovation project, finally having the time tops the list for Aussie renovators (35% of homeowners who renovated their primary homes in 2015), ahead of finally having the financial means (34 percent).
“As the largest survey of home renovation, decorating, and building activity published, Houzz &amp; Home provides unprecedented insights into how homeowners are updating their homes,” said Nino Sitchinava, principal economist at <a href="https://www.houzz.com.au/">Houzz</a>. “Our 2016 findings uncover the factors behind what is driving so many Australian homeowners to renovate to create their ideal home rather than purchasing one that is ‘perfect’ as is, as well as how these factors differ by generation. Interestingly, while the generation of homeowners between the ages of 24 and 34 still comprise a small share of the homeownership population, we’re finding that they are quite active when it comes to home upgrades, and are eager to make their homes their own.”
POPULAR PROJECTS
● Homeowners are prioritising renovation and addition projects in their kitchens (26 percent and 6 percent, respectively), living/family room (25 percent and 7 percent, respectively), non-master bedrooms (20 percent and 4 percent, respectively) and master bathrooms (19 percent and 4 percent, respectively).
● Updating an outdated or undesirable design/style is the top issue addressed in Aussie kitchens and bathrooms (44 percent and 49 percent, respectively). Old or outdated finishes is the top issue being addressed in other interior room renovations (38 percent).
● Many homeowners are tackling home systems upgrades including plumbing (32 percent), electrical (31 percent) and cooling (19 percent).
● For exterior upgrades, top projects include updates to paint (28 percent), gutters/drain pipes (22 percent) and decking (22 percent).
BUDGET? WHAT BUDGET?
● One-third of renovating homeowners take on a renovation project without setting a budget (33 percent), and close to the same share exceed their established budget (27 percent). These figures are largely consistent across all age groups.
● The top budget buster is the decision to opt for more upscale products and materials (44 percent), ahead of products/services being more costly than expected (42 percent) and the discovery of unexpected construction-related issues (33 percent).
● Aussie homeowners on Houzz spent $68,300 on average in home improvements in 2015. Homeowners aged 35-54 drive home renovation spend ($80,300 on average), investing almost twice as much as Millennial homeowners in their home upgrades ($41,200 on average) and a fourth more than those aged 55+ ($57,500 on average).
● When it comes to spending on kitchen renovations – the top home renovation project in 2015 – homeowners spent an average $31,000 on major renovations* of a large kitchen (more than 12 square metres), and $21,840 for major renovations of a small kitchen (less than 12 square metres).
● In terms of bathrooms, homeowners spent an average of $16,440 on major renovations* of a large bathroom in 2015 (more than 5 square metres), and $14,770 for major renovations of a small bathroom (less than 5 square metres).
● How did homeowners finance these projects? The majority of homeowners continue to use personal savings/finances to fund their renovations (78 percent), followed by cash from mortgage refinances (16 percent) and credit cards (14 percent).
A HELPING HAND
● Nine in ten homeowners renovate their homes with professional help (89 percent).
● Professional hiring is popular across all generations of homeowners, although it is slightly higher among those age 55 and over (91 percent, vs. 89 percent for those 35-54 and 85 percent of those 25-34).
● A third of homeowners who hire a professional for their renovations select a home builder (21 percent), while 14 percent hire a kitchen designer or renovator, and 13 percent hire a landscape contractor or gardener.
● Top specialty trades include electricians (71 percent), plumbers (57 percent), and carpenters (40 percent).
THE HOUZZ &amp; HOME SURVEY
*A major renovation at minimum replaces all cabinetry and appliances. Additions are not included in these numbers. Numbers include both DIY projects and those which used design or construction professionals.
The full Australian report is available <a href="https://info.houzz.com/rs/804-JLJ-529/images/Australia_Houzz_%26_Home.pdf">here</a>.
The full Australian report is available <a href="https://info.houzz.com/rs/804-JLJ-529/images/Australia_Houzz_%26_Home.pdf" target="_blank">here</a>.
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Renovation trumps buying 'perfect' home, Houzz study finds

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As Channel Nine officially start casting for the next contestants for season 13 of The Block, it is reported that St Kilda's grubby Gatwick Hotel could be the heroic site to renovate.
It looks like the show, who worked on the seedy Savills Hotel in season 11, are set to make the Gatwick their biggest layout in the show's history. 
The 64 room hotel had been on the market for a year before being removed from the market in October with an ambitious $11 million asking price.
It has been reported by the local papers that the producers of the reality TV series were in serious negotiations however it is yet to be formally apparent as a done deal.
It would be far and away the biggest price the Block will have paid for a development site and would be over double of the $5,025,000 they paid for the <a href="https://www.urban.com.au/news/56984-how-much-did-the-block-port-melbourne-cost" target="_blank">Port Melbourne soap factory</a> for the last series.
The Gatwick Hotel traded for $3.04 million in 1998.
It could be renovated by a fresh batch of contestants, with the ad on <a href="https://www.castasugar.com" target="_blank">www.castasugar.com</a> only appearing in the last few days.
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The Block 2017 starts casting contestants as St Kilda's Gatwick Hotel tipped

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Recent homebuyers are taking on larger scope projects than all other home renovators according to the Houzz &amp; Home Australia survey from Houzz, the platform for home renovation and design.
The survey, of almost 10,000 respondents in Australia and more than 185,000 globally, revealed that over a quarter of renovations are driven by recent home purchases (29 percent).
Recent homebuyers are nearly twice as likely to renovate all of their interior spaces than the average home renovator (15 percent versus eight percent, respectively).
When considering priorities, kitchen projects top the list for recent buyers (31 percent versus 25 percent for the average renovating homeowner), followed by living rooms (32 percent versus 23 percent) and master bathrooms (22 percent versus 17 percent).
“2016 was another strong year for the home renovation market, with homeowners continuing to invest in their homes," said Nino Sitchinava, principal economist at Houzz.
“While the majority of renovations are spurred by homeowners’ desire to upgrade a home they have lived in for some time, recent home purchases are also an important driver of home renovation activity.
“Recent homebuyers tend to do more, spend more, and are more likely to hire professionals to help with their renovation projects than other homeowners.”
This year is on track to be another boom year for home renovations, with half of homeowners on Houzz planning to begin or continue renovations in 2017 (50 percent).
Homeowners plan to spend an average of $47,000 on home renovations in 2017. In 2016, kitchen renovations commanded the highest spend ($19,300), followed by master bathrooms ($12,300).
Other top findings include:
Energy Efficient and Healthy Homes:
● While design and functionality top the list of renovation considerations (both 74 percent), almost half of homeowners consider energy efficiency extremely important to their projects (42 percent). To create more energy efficient homes, homeowners are installing home automation technology and solar systems during their renovations (8 percent and 7 percent respectively). Home automation is even more common among recent buyers (15 percent).
● Australian homeowners are also health conscious with almost a quarter reporting health concerns as a priority factor to their renovation project (24%).
Cash is King:
● Seventy-nine percent of homeowners reported to have used cash and savings to fund their projects in 2016.
● Refinancing trails behind at second (15 percent in 2016), with recent homebuyers more likely to refinance than long term owners (21 percent versus 15 percent, respectively).
● Recent buyers are also more likely to use credit cards to fund their projects (16 percent versus 13 percent for long term owners).
Breaking Budget:
● The top challenge facing renovating homeowners in 2016 was staying on budget (34 percent).
● Other top challenges include finding the right products and materials and finding the right service providers (both 33 percent).
Pro is The Go:
● Nine in ten renovating homeowners hired professionals for their renovation projects in 2016, consistent with 2015 (both 89 percent). Recent homebuyers are even more likely to rely on professional help than long term owners (92 percent versus 88 percent, respectively).
Raring to Renovate:
● One in two homeowners on Houzz report plans to renovate over sell their homes (53 percent versus seven percent respectively).
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Recent homebuyers drive renovation activity, Houzz study finds

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Renovation loan applications have surged over the past six months, highlighting the dilemma of housing affordability, according to home loan lender ME.
Applications for cosmetic loans rose 48% while structural loan requests grew 25% between January and June.
The average amount borrowers requested for structural-related loans such as new builds was $400,000.
For cosmetic-related loans such as kitchen and bathroom renovations, the magic number was $40,000, it said.
ABS figures also confirm renovation lending has reached a new seven-year high:
<a href="https://www.propertyobserver.com.au/images/2017/08/24/ME.jpg" target="_blank">Click to enlarge</a>
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/24/ME.jpg" alt="">
Even CommSec <a href="https://www.urban.com.au/expert-insights/73063-renovation-loans-at-7-year-high-craig-james" target="_blank">chief economist Craig James</a> said last month that in trend terms, loans for alterations and additions of homes (renovations) hit 7-year highs. 
ME Head of Home Loans, Patrick Nolan said the trend towards renovation funding could be related to the high cost of housing.
“While many homeowners are still relocating, it is clear many are choosing to stay put to avoid the high house prices, and expenses such as stamp duty,” he said.
A majority of ME customers are using equity in their home to fund their renovations.
“Home equity is what’s left over when you subtract your home loan from your property’s current market value,” said Nolan.
“If you’ve owned your home for a number of years it’s likely you’ve racked up some impressive gains in home equity.”
Sydney property owners have the most equity in their homes, an average of $443,900 per property, compared to $276,845 in Melbourne and $203,813 in Canberra.
“If you’re ahead with loan repayments, you may be able to use redraw to dip into your equity,” adds Nolan.
“It’s a simple option but you are limited to the value of those additional repayments. Having a loan with an offset account can be an easier way to access equity.”
According to Nolan, renovation is a smart idea to use the equity in one’s home as it typically adds value to the property.
“In addition, quality home improvements can add to your lifestyle and save on the cost and hassle of relocating to a new home.”
He said it was a good idea to check your suburb before spending a bomb on a makeover.
“To avoid spending more on the renovation than the value it adds to your home, consider the market in your area to be sure your improvements will fit in. Adding a fourth bedroom for instance, can make sense if you live in a family-friendly suburb, less so if you’re in an area popular with young singles.
“Next, put your hard earned cash to work where it will deliver the greatest benefit. High quality kitchen and bathroom renovations almost always add value to a property because they have broad appeal. The same can’t be said of outdoor spas or swimming pools, which can be high maintenance and don’t always deliver a fiscal return.”
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jonathanchancellor-7SQnKwU6yx

ME bank sees spike in renovation applications

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Buyers always love a dump, so a dilapidated Darlinghurst terrace has seen potential buyers carefully streaming over its slightly perilous wooden floorboards over the past few weeks.
The home was listed with $1.75 million hopes through James Peach at Ray White TaylorJones for weekend auction.
Property Observer set up a video of the auction below.
<iframe src="https://www.youtube.com/embed/c0-daf8pCrc" frameborder="0" width="450" height="253"></iframe>
It sold at $1,885,000.
The four bedroom, one bathroom house located at <a href="https://www.realestate.com.au/sold/property-house-nsw-darlinghurst-126288502" target="_blank">141 Womerah Avenue</a> dates back to the 1890s.
It features an original floorplan spanning two levels on the 108 sq m block.
It last sold in 1955 when machinist Humbert Teuma paid £3,150.
The listing agent James Peach suggested that $500,000 plus would be needed to bring the terrace up to scratch. 
 
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jrobinson-rf4aSBido9

Auction of dilapidated Darlinghurst terrace: Video

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A Surry Hills terrace, completely dilapidated with missing ceilings and floors, has sold for $1.6 million.
It had a $1.5 million price guide and only spent five days on the market through Bresic Whitney Darlinghurst agents Darren Pearce and Romany Brooks.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/26/Surry3.jpg" alt="">
The wide terrace, which was a four bedroom, two bathrooms house, is set on a 150 sqm Waterloo Street parcel in the heart of Surry Hills.
It was advertised as having limited access for inspections.
Recently $70,000 was spent on installing beams to support the ceiling and staircase.
Rubbish and household items were also removed in the process.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/26/Surry2.jpg" alt="">
The home had been vacant for the last decade, with neighbours complaining about rubbish pile up.
In Darlinghurst another dilapidated terrace - although not quite as much as this one - fetched $1,855,000 at its weekend auction.
Property Observer set up a <a href="https://www.urban.com.au/news/75381-run-down-darlinghurst-terrace-video" target="_blank">video of the auction which can be seen here</a>.
 
 
 
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Surry Hills dump sells for $1.6 million after five days

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Cherie Barber, the TV renovation queen and founder of Renovating for Profit, has announced the five winners of this year’s Young Renovators Scholarship.
Tegan Fitzhardy (14), Liam Singer (14), Claudia Howlett (16), Rafi Licenblat (15) and Cooper Page (15) were selected out of hundreds of entrants from across Australia. They have been invited to join Cherie Barber and the RFP team at the next 3-day workshop in Sydney from 14-16 December and learn the ins and outs of how to buy and renovate property for profit.
This marks the second year of the Renovating for Profit Young Renovators Scholarship Program, which offers young people aged between 12 and 17 the opportunity to sit Cherie’s three-day bootcamp, 12 months mentoring from Renovating For Profit’s expert property coaches and a comprehensive homestudy kit containing over $37,000 worth of educational materials.
The image above is Cherie with the winners of the scholarship last year.
Cherie was inspired to establish the Young Renovators Scholarship Program in 2015 after then 12-year-old Akira Ellis attended a RFP training event with his father. Cherie immediately noticed Akira eagerly writing notes and learnt that he wanted to buy and renovate a property as soon as possible so she gifted him entry to her three-day workshop and personally mentored him throughout his first renovation project.
“There are so many young people like Akira who want to learn about property investing and how to turn bricks and mortar into tangible profits; especially with current property trends. Akira and last year’s winners have already completed successful renovations using the knowledge they acquired through the bootcamp and are well are on the way to building profitable property portfolios. I’m so excited for this year’s winners and look forward to helping them become successful renovators too,” says Cherie.
The five winners will be joining Cherie and the Renovating for Profit team at the next three-day event to be held at the International Convention Centre Sydney on 14-16 December.
 
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Cherie Barber announces Young Renovators Scholarship winners

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Kyal and Kara Demmrich, who appeared in the popular renovation show earlier this year, have listed their Long Jetty renovation project that they've been documenting room by room.
They've been keeping a journal on <a href="http://www.kyalandkara.com/journal" target="_blank">www.kyalandkara.com/journal</a>.
The couple have also been updating their progress on a joint Instagram account.
Two days ago accompanying a picture of the front deck and driveway, the reno duo stated that they were nearly finished.
"Wow thank you all so much for your lovely comments on our before/after pic," the post read.
"We’ve had a lot of fun doing this project, HARD work but we’re almost at the finish line #LongjettyReno."
Kyal said he and Kara, who are also regulars on The Living Room, thought the unique, retro-influenced feel of the Palm Springs style was an appropriate fit for Long Jetty.
“Palm Springs is a unique city in that it’s like an oasis in the Californian desert,” he said. “Kara and I love how this unique setting gave birth to these design influences which celebrate the outdoors, cooling colours and well-defined architectural lines.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/11/21/KyleKara.jpg" alt="">
“Long Jetty has its own distinct feel and flavour on the Central Coast, and we wanted our home to be like a little oasis within a sought-after neighbourhood.”
The home at <a href="https://www.realestate.com.au/property-house-nsw-long+jetty-127033446" target="_blank">82 Pacific Street</a> has four bedrooms, three bathrooms and indoor and outdoor living areas.
An intricately hand-laid limestone and cladding façade offer a soothing entry point from which the new owners will be able to ‘switch off’ from the activities of the day. 
Raked ceilings soar up to 3.6 metres in living areas which, when combined with skylights, casement windows and oversized stackable glass sliding doors, provides a grand statement and sense of space.
The master bedroom is separate from the other bedrooms, with ‘his’ and ‘hers’ walk-in robes adjoining the ensuite. 
The gourmet kitchen adjoins the outdoor entertaining area where the Palm Springs influence dominates through sleek pool and breezeway blocks providing privacy from the neighbours.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/11/21/Kara.jpg" alt="">
LJ Hooker Bateau Bay agents Paul Witney and Penny Hancock are marketing the home for a December 16 auction.
Long Jetty's median house price has risen over 17 percent in the last 12 months, according to CoreLogic, and 62 percent in the last three years. 
 
 
 
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Former Block stars Kyal and Kara Demmrich list Palm Springs-inspired Central Coast renovation

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The Melbourne based chippies and half brothers, Tim, 32, and Mat, 27, (pictured above) think that they will have the upper hand in the 2019 series of House Rules.
There's no bookies taking bets quite yet ahead of Sunday night's premiere, but the duo reckon they have the requisite "background in carpentry and building, along with being able to visualise things before they are put together".
They will be having Tim’s family home, <a href="https://www.realestate.com.au/sold/property-house-vic-thornbury-128700662" target="_blank">a 1950s weatherboard cottage in Thornbury</a> (pictured below) that’s never been seriously renovated, get the makeover.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/26/thorn.jpg" alt="">
It cost $972,000 last July, having been held in the same family for over 50 years.
The charming double-fronted home, marketed by Nelson Alexander as having a well-maintained interior, comprises an entry foyer, three large bedrooms, central living room leading through to an updated kitchen and meals area.
There's a separate laundry, store room and verandah that overlooks a large rear yard offering plenty of scope and opportunity to expand on the 352 square metre block.
It had been listed with a $900,000 to $990,000 price guide.
This year, six teams won't just renovate, they will be required to innovate.
The six teams will be renovating and styling each other's homes, with the aim of taking out the top prize of $355,000 in the seventh series of the reality renovation show hosted by Joanna Griggs.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/26/lisa-andy.jpg" alt=""> 
Lisa and Andy 
SA couple Lisa and Andy had been together for 11 years before they got hitched. 
Newlyweds, Lisa, 30, and Andy, 32 have previously renovated a home. The fireman and flight attendant live in Adelaide.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/26/mikaela-eliza.jpg" alt="">
Mikaela and Eliza
Not so WA renovation rookies, Mikaela, 24, and Eliza, 21, the surfie sisters who have both been ranked among the top 100 female surfers in the world. Their family home is in the Margaret River region.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/26/pete-courtney%201.jpg" alt="">
Pete and Courtney 
Victorian dance teachers Pete, 32, and Courtney, 31, come with one of the biggest houses the show has ever seen. 
The pair, who live in a huge brown-brick '80s mega-mansion, are no strangers to renovations, having once flipped a three-bedroom apartment in two weeks. They live in the foothills of Victoria’s Dandenong Ranges at Ferntree Gully.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/26/shayn-carly%201.jpg" alt="">
Shayn and Carly
Sunshine Coast couple Shayn, 33 and Carly, 31 says their family is fast outgrowing the house. 
Civil engineer Shayn, who has worked as a chippie and construction supervisor, and wife Carly actually call it their three-bedroom double-brick "prison".
"It's a small rectangular box with bars on the windows, security screens all over the place and not much light," Shayn says.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/26/katie-alex%201.jpg" alt="">
Katie and Alex
The married NSW-based couple Katie and Alex have a little cottage built in the 1880s in NSW’s Southern Tablelands having moved there from the ACT. 
The stay-at-home mum, and midwife, Katie, 29, and Federal Police officer Alex, 32, desire a working kitchen and a master bedroom that doesn't leak at their Gundaroo home.
A derelict warehouse will serve as the first big test for this year’s teams on House Rules.
Season 7 premieres on Sunday April 28 at 6pm.
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