The latest Renovations Roundup report released by the Housing Industry Association revealed that in the face of rising house prices and falling interest rates in home renovation loans, more Canberrans are choosing to renovate their existing home rather than buy a new one.
“Borrowing money has become more affordable as interest rates are low, and will continue to drop lower,” said Shane Garrett, senior economist at HIA. “Many homeowners have decided to shelve plans to move house and instead, conduct major renovations work on their existing homes.”
According to the report, Canberrans are expected to shell out $367 million this year on home renovations. Projections show that this can increase to $398 million by 2019, and Garrett expects a “fairly modest but steady rise in the ACT until 2020,” thanks to low interest rates.
“Dwelling prices in the ACT have sped up, which makes people want to do renovations work,” he said.
This year is the third consecutive year that home renovations marked growth, following a slump in 2012 and 2013. Homeowners are choosing this option because it is cheaper than buying a new property.
“We had to weigh up the cost versus the benefit. We wanted to stay in the area, and it was more financially effective to do a renovation,” said Rochelle White, who opted to renovate her family home of six years rather than buy a new one. “We decided that was better than spending several hundred thousand dollars more. We certainly have ended up with a home we’re happy with for the long term.”
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