With new home building subsiding, the Housing Industry Association (HIA) estimate that the $32 billion home renovation market will realise growth in 2018. In fact, the HIA anticipate modest renovation activity due to the number of detached homes reaching the critical renovation age of 30 to 35-years.
According to the HIA, the home renovation market will enter a growth phase in 2018 that will continue throughout 2020. This growth will see the market increase to $34.7 billion. Forecasts estimate the renovation market will realise a 0.4% growth in 2018, a 4.9% growth in 2019, and a 2.9% growth in 2020. This growth will increase the value of the renovation market to $35.12 billion as it’s directly linked to the slowdown of new dwelling construction.
Some of the most popular home renovation trends will include areas of frequent use such as kitchens and bathrooms. Other popular home renovation trends include gardens complete with irrigation, outdoor entertaining areas, and repainting the exterior and interior of a home.
So, how can a homeowner fund their renovation projects?
One of the easiest ways to renovate your home without taking out a personal loan is to use your home equity. This solution is not only a frequently used way to fund reno projects, but it is also one of the simplest.
Home equity is the difference between a lender’s valuation of your home and the amount you owe on your loan. Overtime equity typically rises because the value of your home increases, and you reduce the principal as you make repayments. For instance, let’s say you bought your house in 2000 for $287,000, the median in Sydney at the time. Since then, you’ve paid $187,000 off the mortgage and owe $100,000. The bank has also valued your home at $880,000, Sydney’s median value at present. Therefore, you have $780,000 in equity.
However, a lender won’t let you borrow 100% of your home equity. You will need to leave at least 20% of this equity in place to secure your loan. This being the case, the amount of equity you can access is $624,000.
But, a lender also needs to assess your ability to service a higher valued mortgage before they agree to let you use the equity in your home. Plus, it’s highly unlikely that you’ll need to borrow the full amount of equity you have available. So, you then need to calculate how much you need to renovate and how much you can afford to repay.
To calculate these figures, consider the following:
- What are you looking to renovate? – Do you want to upgrade one area such as your kitchen, or do you want to restore your entire house?
- What level of renovation are you considering? – Do you want a stylish finish or luxury?
- Will you be DIYing or hiring a professional? – Do you have the skills to carry out the work yourself or will you employ a tradie?
- Will you need planning permission for your renovation? – If you’re painting and changing benchtops in your kitchen, then you won’t need planning permission. But, if you’re removing walls or looking to extend, then you will need to contact your council.
Once you’ve worked out the basics, then it’s time to use an online renovation and mortgage repayment calculator to estimate your costs. For example, let’s say you decide to renovate your kitchen. A standard kitchen renovation will cost you $40,000, while a luxury will cost $70,000. Based on this, and after getting several quotes you choose to spend somewhere in between at $55,000. This amount takes your mortgage to $155,000, which will increase your home loan repayments over the term of your loan.
If you’re comfortable with the extra repayments you’ll need to make, then it’s time to contact your broker or lender to increase your mortgage. Alternatively, if you have a redraw facility, then you can redraw this amount if you’ve paid extra funds into your home loan.
Some of the hottest colours for 2018 are those that personify an area’s features and give it homely appeal. As such, interior decorators and stylists predict Australian homes will be awash with greys, terracotta’s, blacks, beiges, and soft pinks.
- Greys – Following a Nordic style called ‘Hygge’, which respects what life offers you, greys are pure and create a homeliness. Focusing on natural minerals, this colour palette is an earthy mixture of clay and ore.
- Terracottas – The outdoors is influencing the indoors. According to interior designers gardening has a lot to do with the terracotta influence, which cultivates, nurtures, and connects us to our roots.
- Blacks – Simple, contrasting blacks and whites are back. Blacks make a bold statement, mainly when used as the backdrop for homes featuring leather and timber.
- Beiges – a soft colour, beige enables homeowners to team this colour with blacks and navies. Plus, this tone acts as a chameleon by taking on colours around it to create a layered look.
- Soft Pinks – Adding peace, warmth and tranquillity to your home is as simple as painting it in pale Subtle, neutral pinks team up well with greys and beiges.
The flooring you select for your home has a significant impact on its specific look and feel. If you get the flooring right, then your overall design choices become enhanced. Some popular options for 2018 are:
- Floating Timber – Durable and stunning, timber floors bring warmth into a home and they never feel cold under a bare foot. Selecting a grainy, light timber is far easier to keep clean as they tend not to show up dust.
- Tiles – Neutral toned tiles that aren’t light or dark keep clean easier. Soft, subtle patterns or those with a vein of colour will dominate, rather than bold coloured tiles.
- Vinyl Planks – With advances in technology, vinyl planks look more like hard wood, but for a fraction of the cost. Plus, there is a vast choice of styles, textures, and colours available. Easy to keep clean, hard wearing and stylish, vinyl planks are a popular choice.
- Carpet – Warm and soft underfoot, carpets are ideal for bedrooms and more formal areas. Carpet composition also dictates to price, so if you have a tight budget opting for a synthetic blend over wool will reduce the cost.
By adding texture to your home, you add depth and you give it a unique sense of style. Some of the most sought-after materials in 2018 will be natural and will add texture, warmth, and a touch of class to the home. These are as follows:
- Copper, silver, chrome, and pressed metals – While chrome tapware has never gone out of style, new pieces such as chrome and pressed metal hand basins in bathrooms will become the in-thing. Beautiful and decorative, these pieces enhance existing decor and pair well with timber pieces and colours such as greys, blues, and purples.
- Plants – Living and artificial plants add colour, depth, and character to a home. Heavy foliage plants such as Fiddle-leaf figs, Bird of Paradise and ferns will bring the outdoors in and liven-up the home in 2018. With prominent foliage in a house, decor stands out and becomes accentuated.
- Timber – Timeless and characterful, woods create a nostalgic look that never dates. 2018 colours will be dark and brooding and these will make kitchens and bathrooms pop. Timber tiles will also be on-trend with a vast choice of colours, textures, and sizes available.
A bathroom space needs to be adaptable and practical, with an air of class and character. Why? Well, this area experiences heavy use and while they serve an important purpose, they can also be beautiful, stylish, and luxurious. Popular choices for 2018 include:
- Bigger is better – 2018 bathrooms are big and bold. They are areas for relaxation, recharging and beautifying the mind and body. So, if your bathroom is small, then consider making it more prominent by restyling your home.
- Functional storage – The best bathrooms are those that have space for storage. This way all your hair and face products aren’t left out making the space look cluttered and untidy. By putting in drawers, cabinets, shelves, and self-supporting vanities, you’ll create an open, spacious feel making the bathroom feel bigger than it is.
- Ceramic, marble, quartz, and porcelain – Ideal for the bathroom area, these products are long-lasting, easily kept and add a beautiful touch of class to the bathroom. Plus, these products come in unique geometric shapes and emulate luxury. Natural stones such as marble and quartz also add depth, character, and style to an otherwise dull and often understated area.
If you’re not sure where to start when renovating, then don’t become perturbed. Many great tools and apps can help you make those crucial decisions in a heartbeat. Some of the best for 2018 are:
- Mark On Call – American interior designer Mark Lewison devised a room creation app that lets you experiment with floor plans. Using floor space and dimensions, custom pictures – finishes, rugs, and flooring – you can insert these into your plan and see how they look.
- Dream Floor – Selecting the right floor can be tricky, but with this online tool you get the visual impact of a new floor before you buy. In fact, with this app you can test floors in your actual home using images. Choose from timber to laminate, dark to light and contemporary to classic.
- Paint My Place – For those looking to paint their home inside and out, this app let’s you see how it will look using some of the world’s largest paint brands. So, forget those sample pots, you can now test your colour scheme, then head off and buy supplies.