It’s time for many property owners to swap their auction itinerary on Saturdays for building tools as home renovation loans surge amid worsening housing affordability conditions.
ME Bank figures for the year to June show a big 48 per cent jump in loan applications for cosmetic renovations. There was also a 25 per cent jump for structural renovations over the same time period.
To give some indication of the amount property owners are borrowing for large renovations to their home, the average loan is around the $400,000 mark.
For those wishing to renovate their kitchen and bathroom only, the average loan is around $40,000.
The jump in renovation loan figures are now sitting at their highest point in seven years.
With housing affordability and stamp duty costs putting a barrier in front of property purchases, homeowners are instead choosing to add value to their existing home and using the equity in that home to do it.
Using your equity in the home from capital gains achieved in the last few years can be a successful venture, as long as you don’t spend more on your renovation than the value it will add to your property when it comes time to sell.
Talk to Perry Finance today to discuss your loan options when thinking about renovating your home.