The news is out: New Zealand’s economy is taking a downturn as the global economic outlook continues to weaken. According to the official statement of the Reserve Bank of New Zealand released in late March 2019 (RBNZ):
“The Official Cash Rate (OCR) remains at 1.75 percent. Given the weaker global economic outlook and reduced momentum in domestic spending, the more likely direction of our next OCR move is down.”
The housing market has already reached a plateau and interest rates are staying low. That being said, now’s the best time to get going with the renovation plans you’ve been putting off for years.
Home remodelling is becoming more affordable, so if you have the money, take advantage of this downturn to pick up remodelling projects you’ve always wanted to make.
Yes, not too many homeowners would think about renovating during a recession. And that’s what makes renovating during an economic downturn cheaper. Top-notch talent like builders, plumbers and electricians will be more available. And guess what? They will be offering their services at lower rates. Not to mention, building materials like bricks, concrete and rebar will be cheaper than what they normally cost.
When the economy bounces back, prices are going to skyrocket.
Of course, if you are renovating in order to make more money in the end, you need to be wise about picking the projects to spend money on.
Just last year, Stuff NZ shared a list of home improvement projects that make a good investment:
- Bathrooms – Big or small, bathroom improvements definitely has some of the highest return on investment. This is the area most potential home buyers always check. You can probably change the tiles, upgrade the tapware or fix the plumbing. If you could afford it, definitely go for a modern bathroom, which instantly draw in more attention from buyers.
- Kitchens – Since there are no specific figures for New Zealand, comparably, a kitchen remodel in Australia can increase home value as much as AUG $50,000-60,000. But a full gut and refresh would set you back at least $30,000. If that’s beyond your budget, you could do minor work such as repainting, upgrading the cupboard doors and hardware or installing a stone countertop. Consider that potential buyers like to picture themselves in a house they plan to buy. They often like to walk through the kitchen, peek inside kitchen cabinets and soak up the atmosphere. A fresh coat of paint is always a good idea, but it’s best to keep the colour neutral so it appeals to wider market. If your kitchen isn’t quite efficient in terms of traffic and ease of use, then you could rearrange the space or add a kitchen island.
- Add a deck – An outside deck is a much-preferred house feature for outdoor-loving Kiwis. Plus, it expands your home’s living space. Adding a deck could increase your home’s market value by up to 30 percent. Depending on the size and materials you use, a standard 20m2 deck would cost anywhere from $3,400 to $12,100 to build.
- The exterior – First impressions do count, so pay attention to your home’s kerb appeal. No need for drastic changes here, but just look for areas that need repair or updating. For instance, repair and repaint damaged weatherboards, add insulation, fix draughty or rattling windows. Do a bit of landscaping as well.
To make the most of your renovation, don’t overcapitalise it. Sometimes, drastic plans backfire and don’t pay for itself. As much as you want to sell, you also want to get the most enjoyment from your home.
If your budget is tight, you’re going to have to do majority of the work yourself. But if it’s a considerable-sized project, it’s smarter to get a renovation specialist to figure out affordable solutions and ensure a smooth process from start to finish.
Tell us about your renovation plans on 0508 2 RENOVATE.