In Australia as in the United States, the housing market has been in a definite slump for the past few years. Also similar to the U.S. is Australia’s housing recovery, based largely on home renovations. There Housing Industry Association found, “Home renovation is bouncing back to be a $30 billion-plus contributor to the national economy.” With this similarity come other parallels between the U.S. and Australian housing markets with implications for citizens of both countries.
Home maintenance on the rise
For instance, simple home maintenance projects postponed during troubled financial times are finally being attended to and make up a large portion of home renovation spending. Kitchens and bathrooms tend to need updating every 15 years, and some that have been long overdue are now adding their weight to the stack of commissions pouring in to home construction contractors. People are now also choosing to sacrifice their big yards for the sake of larger floor space for entertaining, storage, and well-stocked chef’s kitchens.
Aging in place
Another trend found on both continents is the decision baby boomers are making to “age in place.” The Housing Industry Association explained, “Baby boomers, those classified . . . as aged in their mid to late 60’s, are using their superannuation payouts to renovate.” When they renovate, they do so in lieu of moving out.
The HIA said, “Much of their renovating is major, and many of them will live in their own, freshly made-over homes longer than earlier generations.” Which may mean more maintenance issues, but fewer moving expenses. It also means fewer people moving to senior living facilities and possibly more care being done by other family members.
First-time home buyers
Opposite these baby boomers on the housing spectrum are first-time home buyers whose paychecks have been impacted by unemployment rates and inflation. They have little to spend on their first homes and tend to “buy on the cheap,” intending on fixing up their homes as the money becomes available.
Between these two stages of life, the HIA identified another category: the DIYers, “where handymen and handywomen buying homes to renovate and sell, has proliferated.” Some DIYers choose to live in the homes they renovate, thus avoiding extra taxes and fees, while others employ the quick buy, quick sell approach. Lower interest rates facilitate these purchases and expenditures on renovations.
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