Homeowners are spending a lot less on home renovations
The FNB Estate Agent Survey, which looked at the overall home maintenance and upgrade levels in the 1st half of 2018, suggests that homeowners are now prioritising maintenance over upgrades and improvements.
As a growing number of homeowners become financially squeezed in the wake of the recent VAT and petrol price increases, upgrading kitchens and bathrooms becomes less of a priority for them than repairing the rooftop in the years after buying a home, the FNB Estate Agent Survey for the first half of 2018 suggests.
The survey, which measured agent perceptions of overall home maintenance and upgrades, revealed a significant weakening from 22.85% of total agents in the 1st quarter of 2018 to 15.5% of agents in the 2nd quarter of 2018, who perceive upgrades and improvements as important to homeowners.
It appears that homeowners are now driven by a desire to maintain their homes as the perception of home maintenance by agents increased from 37.35% of agents in the 1st quarter of 2018 to 41.85% in the 2nd quarter, significantly higher than the 31% low registered in the 3rd quarter of 2017. There is also a slight uptick in the number of owners who only fix basic maintenance issues, growing from 9.85% of agents in the 1st quarter of 2018 to 11.85% in the 2nd quarter.
John Loos, FNB Property Sector Strategist commented on the findings: “This reflects a Household Sector that is increasingly financially constrained, thus cutting back on luxuries such as home upgrades, but not significantly financially stressed yet (financial stress would result in greater cutbacks in home maintenance too, such as was the case around the 2008/9 recession).
Loos concludes that home maintenance projects are still considered to be more widespread than it was during the 2008/9 economic crisis. This holds significance from a home loan point of view as lenders want to see homeowners protect the value of the security backing of a residential mortgage.
