4102.0 - Australian Social Trends, 2002
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 09/05/2002
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Housing and Lifestyle: Home renovation
People living in renovated homes In 1999, 62% of family households (compared with 50% of non-family households) lived in dwellings which had undergone some type of renovation in the previous 10 years. Of all family households, couples with children were most likely to live in a renovated home (67%). Higher income households were more likely to live in renovated dwellings than lower income households (65% of households in the top two income quintiles, compared with 47% in the lowest two). This is consistent with higher income households being more able to afford either renovations or the purchase of recently renovated (and therefore more expensive) dwellings. In 1999, approximately 63% of all households where the reference person was of workforce age (15-64 years) lived in a dwelling which had been renovated in the last 10 years. Households with a reference person aged 25-44 years were the most likely to live in a renovated dwelling (66%), while those with a reference person aged 65 years or over (retirement age) were the least likely to live in a renovated dwelling (43%). The higher propensity for households with a reference person of workforce age to live in a renovated dwelling in 1999 is linked with the higher incomes of households living in renovated dwellings, as household income is usually highest when its members are employed. HOUSEHOLDS IN RENOVATED DWELLINGS(a) - 1999
Source: ABS 1999 Australian Housing Survey. Many owners buy a house with the intention of making changes.1 In keeping with this, most home owners renovated their homes within a relatively short period of acquiring them. Alternatively, many owners purchase a recently renovated dwelling, usually to either obtain an up-to-date older home or reflecting sellers' marketing strategies of renovating their home before selling it to increase the sale price. In 1999, dwellings which had been occupied by the current owners for up to 10 years were somewhat more likely to have been renovated in the previous decade than those which had been occupied by the current owners for more than 10 years (60% and 56% respectively). People who participated in home renovations often put considerable time into this activity. In all tenure types in 1997, the 2% of men who participated in home renovating spent an average of almost 3 hours per day on renovations, while the 1% of women who participated in home renovating spent 1 hour and 40 minutes per day on renovating their home.5 This reflects the fact that many renovations are not undertaken by residents of the dwelling. AGE OF REFERENCE PERSON IN RENOVATED DWELLINGS(a) - 1999 (a) Owner-occupied dwellings renovated in the 10 years to 1999. Source: ABS 1999 Australian Housing Survey. Renovated dwellings In 1999, separate houses were the most likely of all dwelling types to have undergone renovations (59%, compared with 52% of semidetached houses and 40% of flats) during the previous decade. Renovations were also more likely to have been carried out on older dwellings, with 61% of dwellings aged 20 years and over having been renovated in the previous decade, compared with 49% of those aged less than 10 years. Renovations (especially kitchens, bathrooms and extensions) are often carried out on older homes to upgrade amenities (see Australian Social Trends 2001, Household amenities) and to meet the lifestyle and needs of the current owners.1 Additionally, they may reflect the design, tastes and innovations incorporated into newer homes. RENOVATED DWELLINGS(a) - 1999
Source: ABS 1999 Australian Housing Survey. With the exception of very old houses, the older a house is, the more likely it is to be renovated. In 1999, 66% of dwellings built between 1920 and 1949 had been renovated over the 10 year period to 1999. In addition to older homes being more likely to need renovating than newer ones, some home owners may be willing to purchase an older dwelling which is in need of renovation.1 In 1999, Australian households indicated that almost 7 million renovations had been carried out on the dwellings of 2.9 million households in the previous decade. This meant that, on average, renovated dwellings had undergone two or more types of renovations over the period. This is consistent with older dwellings being in need of overall upgrading, hence requiring more than one type of renovation. AGE OF RENOVATED DWELLINGS(a) - 1999 (a) Owner-occupied dwellings renovated in the 10 years to 1999. Source: ABS 1999 Australian Housing Survey. Types of renovations In 1999, 2.9 million households' dwellings had been renovated at least once during the previous decade. The most common types of renovations carried out over this period were kitchen upgrades (1.1 million), pergolas or similar constructions (1.1 million) and bathroom upgrades (almost 1 million). A further 1 million dwellings had undergone other internal renovations. Kitchen and bathroom renovations are likely to be common because these are high-utility areas which suffer from wear and tear, and tend to date (such renovations were most often carried out on older dwellings). While many rooms can be changed or updated with furniture or a different coat of paint, kitchens and bathrooms are more likely to require the removal and replacement of old fixtures, and may involve tiling, plumbing and new appliances.2 Pergolas and similar constructions are likely to be common renovations because they enhance the possibilities for outdoor living and some provide shade around the house to help with insulation. The addition of security doors or screens to 846,000 dwellings in the decade to 1999 may indicate an increased concern about household security and is in keeping with the promotion of home security in the form of lower insurance premiums. TYPES OF RENOVATIONS CARRIED OUT(a) - 1999
(b) More than one answer is possible and therefore components do not add to total. Source: ABS 1999 Australian Housing Survey. Renovation costs and financing The increasing contribution made by renovations to the building industry has led to an expectation that expenditure on home renovations may exceed expenditure on new dwellings by 2002.3 In the year to June 2001, Australians spent $14,321 million on alterations and additions (renovations) to residential dwellings.6 During the same period, new finance commitments for home renovations totalled $3,109 million.7 The 1998-99 Household Expenditure Survey shows an average weekly expenditure of $36 by owner occupier households on housing renovations. This represented approximately 5% of their total expenditure on goods and services.8 The 1999 Australian Housing Survey asked owner-occupier households about their expenditure on home renovations in the previous two years. On average, households which had renovated their current dwelling and incurred associated costs had spent $12,100 on renovations during that period. This average expenditure was double the average cost of renovations ($5,800) and is in keeping with many dwellings undergoing more than one renovation.
In 1999, households in the upper income quintiles spent more on their renovations than those in the lower quintiles (averages of $19,100 and $5,800 respectively). While almost a third (31%) of all households who had renovated had spent under $2,500 on these activities, one-third (33%) had spent over $10,000 on their renovations, including 16% who had spent over $20,000. Renovations which cost the most were dwelling extensions, with households undertaking these renovations spending an average of $30,000 on extensions in the previous two years. Three-quarters of those who had extended their dwelling had spent over $20,000. Renovations such as adding security doors and screens were the cheapest, at an average of $1,200. Of households whose dwelling had been renovated in the previous 10 years, 4% had a loan for which the main purpose was the renovation of their current home. A further 2% had refinanced their mortgage in the previous three years in order to renovate their home (this refers only to new loan agreements and excludes those who make use of the equity in their home or a redraw facility to add to their loan). These figures increased to 6% and 4% respectively for those who had renovated in the previous two years. It should be noted that this includes only those who either took out a loan or refinanced specifically for the purpose of renovating their family home. COST OF RENOVATIONS IN PREVIOUS 2 YEARS(a) - 1999 (a) For owner-occupier households whose dwelling had been renovated in the previous 2 years. Source: Housing Characteristics, Costs and Conditions, Australia, 1999 (ABS cat. no. 4182.0). Endnotes 1 Baum, S. and Hassan, R. 1999, 'Home owners, home renovation and residential mobility', Journal of Sociology, vol. 35, no. 1, pp. 23-41. 2 Archicentre Ltd 2001, Australian Renovation Trends 2001-2002, Archicentre Ltd (a division of the Royal Australian institute of Architects). 3 BIS Shrapnel, <URL:http://www.bis.com.au/bc3> (accessed 24 January 2002). 4 Australian Bureau of Statistics 2000, Building Activity, June quarter 2000, cat. no. 8752.0, ABS, Canberra. 5 Australian Bureau of Statistics 1997, How Australians Use Their Time, cat. no. 4153.0, ABS, Canberra. 6 Australian Bureau of Statistics 2001, Australian National Accounts: National Income, Expenditure and Product, December Quarter 2001, cat. no. 5206.0, ABS, Canberra. 7 Australian Bureau of Statistics 2001, Housing Finance, July 2001, cat. no. 5609.0, ABS, Canberra. 8 Australian Bureau of Statistics, 1998-99 Household Expenditure Survey.
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