Why the mini-makeover is hot
One of the biggest trends in renovating we might be about to see emerge is the mini-makeover.
Think: paints, cupboard handles, tap fittings, wallpapers (yes, wallpapers going up, not coming down) and the polishing of timber floors. Also light fittings and window treatments. Anything that changes the feel and adds a bit of pizzazz without spending the big bucks.
If that sounds like the ’70s revisited, perhaps it is. Hopefully not with such garish results, though.
And yes, if you are thinking – ‘hang on, hasn’t everyone been doing this all along?’ In part you are right. But the difference is the mini-makeover will be used by householders to make do for much longer than in recent years.
Why will we see this replace bigger aspirations – at least for now? It’s a meeting of several forces.
First, the property market isn’t going anywhere in a hurry at the moment – so the belief that you can do a big reno and flip the property to make a good quid is quickly dissolving.
Second, Australians are saving more than we have in years and there’s a propensity to pay down debt. That means making do with what we have and not taking on huge loans to expand our lifestyles.
It’s also dawning on some people that one way to make money off housing in this current market is not to buy and sell in a hurry, but to shake the housing debt as fast as you can and that way lower your overall costs of acquiring an asset that is free from capital gains tax.
More broadly, employers continue to report that the biggest thing employees are chasing isn’t dollars but work-life balance. Money is still important, yes, but there’s a greater focus on living a life outside of the office, and people aren’t jumping ship for an extra $5,000 or $10,000 like they were a few years ago.
So if they are working less and aren’t prepared to move for a bit more cash, it’s a fairly reasonable conclusion that people will be looking to make their dollar stretch further by extending the life of their current home.
There’s another force – again related to the slowdown in the property market. Industry talk says there’s been a general shift in the mindsets of homeowners – people now expect to stay in their homes for longer. And if you’re in for the long haul, you’ve got the luxury to plan and think – ‘right, I’ll paint that old laundry for now and make it last a few more years before we get around to building a new one’.
After all, you’ve got years to live in the house, and you’re not in such a hurry to get it sorted to flick it back on to the market.
It’s all happening at the same time that we are hearing of the re-emergence of the three-bedder as the house to have – but this time with a second toilet attached. For many, that could mean bye-bye to the media room, the fourth bedroom and the extra study. And who needs those, anyway, when you’re watching movies on your iPad and emailing on your smartphone?
A comfy chair and a flip-down desk that can be discreetly packed away into the wall when not in use might suffice for a study.
And with books, DVDs and music all going digital, there’ll be more space in lounge rooms to accommodate that kind of nifty set up.
I’m not suggesting houses will be totally devoid of all books but you can see collections will get smaller – for example why buy a hard copy dictionary for the study when it’s much simpler and easier to use an app on your phone?
There’s been a school of thought in recent years – which persists today, driven in part by property marketing – that it’s cheaper to detonate a house and start again, than renovate. Homeowners are often lulled by the lower prices that large home-building companies advertise.
True, looked at on a square-metre basis, it might be cheaper to build anew than renovate – some say it costs half as much on average. But if you are being more frugal and making use of what you have, then perhaps the renovation would involve a much smaller extra footprint and be cheaper overall.
The awakening on the cost of debt since the GFC is intermingled with this mini-makeover trend. Obviously it’s an awful lot cheaper to use the money you have saved to fund renovations rather than keep increasing the size of your home loan. And if you can spend a few thousand dollars to make your house more liveable and avoid or put off for several years having to borrow $100,000, $200,000, $300,000, you could be much better off financially in the long run.
When working out how much you should spend on a mini-makeover, it’s helpful to calculate what borrowing the money for the major renovation would cost you and do your sums backwards from there.
The trick to extending the life of what you’ve already got without pouring money down the drain, is getting a good picture of where you want to take your property in the long term (which might involve getting a building designer or architect in), and working out what you can – and can’t – live with for now.
For example, if you want to make do with your ratty old kitchen for a few more years, painting it, and replacing the door handles, taps and even the lights might be a good investment. But upgrading the oven or the range hood to something you may or may not use in the new kitchen is possibly a waste of money.
And of course, like any renovation, you need to be well-researched and enter with eyes wide open so you know what the hidden costs might be.