5 Reasons Why A Recession Is A Great Time To Renovate!
With mortgage rates increasing, stubbornly high inflation and subdued business and consumer confidence, you may be wondering whether now is in fact a good time to undertake home renovations.
Despite all the doom and gloom, if funding is available and not likely to cause financial distress, there are some upsides to renovating your home in an economic downturn.
Availability of builders
The last few years have seen the NZ building industry stretched to capacity as residential building activity increased significantly in a bid to keep up with the demand for more homes. Now, with house prices softening, both new home buyers and developers are struggling to make the figures work. Many are electing to put their plans to build on hold until market conditions improve.
This means more builders are becoming available and looking for work. But a potential over-supply of builders, doesn’t necessarily mean an oversupply of high-quality operators. More ‘cowboys’ will also be searching for their next victim.
It becomes more important than ever to research and select the right builder for your renovation project. Knowing the right questions to ask will mean you have a better chance of finding the qualified, experienced expert you want working on your home.
You can read our top tips for choosing the right builder for your renovation project here.
Q
uicker consents
In the first four months of this year, the Auckland Council has already seen a 40% drop in resource consent applications and a 18% reduction in building consent lodgements. Whilst not great news for the building industry, the lower level of consenting activity should mean consents are processed more quickly.
Engaging a professional early in the process will ensure your application and building plans are of good quality and contain all the necessary information and documentation. This should minimise the number of RFIs (Request for Information) that can slowdown the processing of your consent.
Competitive deals
Reduced consumer confidence tends to stimulate retailers into offering competitive deals as they try hard to hit their sales targets. Kitchen appliances, carpets and other flooring options as well as soft furnishings are being advertised with some great discounts at the moment.
But retailers aren’t the only ones chasing the next sale. With less new homes being built, the building merchants and other suppliers in the building industry are also sharpening their pencils. Their focus and attention has now shifted onto those builders who specialise in the home renovations market.
After the price increases of the past couple of years, we’re now experiencing a softening in the cost of building materials as merchants and others try to maintain their volumes and market share.
It makes sense to make the most of the deals out there!
Building costs
The part of the Building Code that covers the energy efficiency of our homes was recently updated. In Auckland more ceiling and floor insulation will need to be installed and any aluminium joinery will need to be double-glazed using argon filled low-E glass with a thermal spacer between the glass to meet the new requirements.
This was the biggest change to the Building Code in over a decade, and it won’t be the last.
There are plans to further increase energy efficiency requirements by way of window installation techniques and the reduction of waste and emissions produced by the building industry is also in the pipeline. And let’s not forget the recent extreme weather events will also mean a larger focus on building more climate resilient homes as well.
Changes that will all come with a cost. So, if you are putting off your renovation plans in the hope the cost of building will drop significantly in the future, please don’t get your hopes up.
Less risky than moving?
Both moving and renovating can be very stressful and with the current uncertainty
in the housing market, deciding whether to stay or go has been made even harder.
Moving houses means carefully balancing how much you’ll get for your current home with how much a new house might be worth. An exercise which has got considerably harder with the average house price in Auckland dropping 14.6% in the last 12 months* and no firm indications that they won’t continue falling.
But if you love the area you live in, then the great thing about renovating is that you can get exactly what you want. You can hang onto the aspects of the house you like such as the view, the great neighbours, good school and with the help of a designer, you are in control – you design your new spaces, you decide where the doors and windows will go, how the house should flow.
Of course, all the above doesn’t matter, if renovating in a recession will put a strain on your finances. But if you do have the resources, now is a great time to consider renovating your home. Not only will you be making it more liveable, comfortable and functional, you may also be adding significant value to your largest asset for if/when you decide to sell.
Contact MyHome Renovations and let us show you what is possible!
*QV Price Index April 2023