Gen Y Big on Renovations
Renovations are back on the agenda, with a growing number of young Aussies choosing to renovate rather than relocate. According to results from a recent study by St George Bank, the urge to revamp existing homes is stronger with the younger generation. Generation Y are increasingly prioritising their savings to pay for renovation projects, with new appliances and furniture on the table alongside kitchen and bathroom renovations and entire rebuilds.
The survey involved 1000 Australian home owners, analysing key differences between generations on the attitudes and finances surrounding renovation projects. According to the study, more than two-thirds of 18 to 25 year old home owners have plans to renovate in the next year. Of these, 68 percent plan to tackle the project alone or with the help of family and friends.
While younger home owners were more keen to revamp their homes, they also have less money to do so. 76 percent of respondents under 34 have plans to spend less than $10,000 on renovations, with 20 percent of Gen Xers looking to spend $20,000 or more. While it is understandable why Gen Y have less to spend than their older siblings, it is worth noting that many lenders look favourably on anyone keen to invest and add value to their home.
"Thirty-four per cent (of Gen Ys) have already saved enough to do the renovation. There's others looking to family members, including their parents, to support them in the renovation." says St George general manager of retail banking Andy Fell, adding "Then there's a third group who look for finance as either an extension on their home loanor an unsecured personal loan."
There are numerous reasons why the younger generation are so keen to renovate, including the simple fact that they don't have enough money to upgrade. "If you can't move to upgrade your property, you are going to spend some time investing in what you have and I think that's why you've got so many people thinking about renovating," says Fell.
Financial constraints also mean younger buyers are more likely to purchase units and small houses, with smaller spaces faster, cheaper and easier to renovate. Gen Y buyers are also generally more flexible than older couples and families, and are more likely to tackle DIY projects for short periods before moving on to a new job or another location. The popularity of TV programs like The Block is also influencing the younger set, as is a proliferation of renovation-based information on the Internet.
"With the market on the rise, they are creating value for themselves and improving the overall value of the property." says 1300HomeLoan managing director John Kolenda, who notes a sharp rise in consumer confidence connected with this trend. While younger Australians often struggle to purchase property in a rising market, those who do seem more willing than anyone else to make the most of their investment.