Aussies choosing to stay put and renovate
Home loans for renovation have seen a massive surge over the last year.
New data from Mortgage Choice shows Australians are keen on renovating. The brokerage’s Loan Purpose Report has revealed a 62.5% rise in loans for renovation purposes from April 2016 to April 2017. Mortgage Choice chief executive John Flavell said renovation loans accounted for 5.2% of all loans written through the company in April 2017, up from 3.2% in April 2016.
“This surge in the proportion of homeowners choosing to stay and renovate their current property is not surprising. The cost of selling and buying a new home can be quite high depending on where you live, and this can outweigh the costs of a renovation,” Flavell said.
Flavell pointed to costs for services such as real estate agents, property marketing fees and removals fees, as well as legal costs, pest and building inspections and loan fees. The cost of stamp duty, Flavell said, can be particularly prohibitive for homeowners looking to move house.
“Say you were to buy a median priced house in Sydney for $990,000. You would have to pay in excess of $40,000 in stamp duty,” he said. “When you factor in the significant cost of stamp duty, plus all the other costs that come with buying and selling property, it is little wonder why so many Australians are choosing to stay where they are and renovate their current home.”
Flavell urged homeowners who were renovating to take time in planning and budgeting.
“Understand that it is not unusual for both costs and time to blow out when renovating property. Give yourself a financial buffer and make sure you know exactly what you are getting yourself in for.”