More Kiwis opting to renovate than sell

Statistics NZ figures reveal we spent $1.5b on renovating houses last year, up from $940 million in 2012. Photo / Thinkstock

Kiwis splash $1.5b on doing up their houses rather than selling and moving

Home renovating has become a $1.5 billion boom industry as a growing number of house owners turn their backs on trading up in a rampant property market.

Statistics New Zealand figures reveal we spent $1.5b on renovating houses last year, up from $940 million in 2012.

And the number of homes being renovated jumped nearly 30 per cent in the past three years.

It is proving to be big business. The Certified Builders Association has reported a leap in renovation work, particularly in the past 18 months.

"It has been a mix of expanding the floor area and complete upgrading of a house," said association chief executive Grant Florence.

"People like the location they are in but need more space so investing in their existing property stacks up."

Florence said homeowners weighed up the costs of renovation with taking the next step on the property ladder and the cost of renovation often won.

Mortgage brokers were also rubbing their hands over the rapid rise in home makeovers.

Property advisor John Bolton from mortgage service Squirrel said he was busy processing renovation loans ranging from $60,000 to $1.1m.

"For some people, there is nothing on the market in the suburb they are in," Bolton said.

"We are seeing a lot more renovations because people are afraid if they sell they won't be able to get back in. They renovate rather than move."

Some first-home buyers were spending up to $70,000 on a new kitchen, insulation and painting and decorating with no structural work. Others added French doors to create flow, and refurbished flooring.

More extensive renovations included adding bedrooms or bathrooms and clocked up loans of up to $200,000.

Bolton had numerous clients who had borrowed up to $1m to excavate under a house, add a garage and a bedroom at the back.

"People don't renovate to make money, they do it so they can enjoy living there," he said.

Last year, 5,277 Auckland homes had significant renovations to the tune of an estimated $661m. In 2012, 4,455 renovations were undertaken to the tune of $387m.

The surge in home renovations in Auckland comes as house prices in the region continue to skyrocket.

Figures released by QV yesterday revealed 31 of the city's 157 suburbs now had an average house price topping $1m. Additions to the group are Grey Lynn, Freemans Bay, Northcote Point, Schnapper Rock and Farm Cove.

The average price in the sought-after suburb of Herne Bay was now just $107,750 off becoming the City of Sails' first $2m suburb.

The average Auckland house price had also soared to $775,555 at January 31, according to QV.