Home maintenance and upgrades are seemingly on the rise. So says an estate agent survey conducted by FNB, which infers that overall, activity on this front is fairly robust.
According to the survey, there has been a distinct uptick in the level of “value-adding upgrades” of late. The percentage of homeowners “fully maintaining their property and making some improvements” and “owners not improving but still fully maintaining homes” has also risen.
Interestingly, the category that “one would want to see declining and which until recently has done so, is the ‘homeowners attending to basic maintenance only’ category,” which in effect means that these homes could possibly fall into decline over time. This percentage increased significantly from 6% at the beginning of 2004 to a massive 34% as of the first quarter of 2009. Thereafter it decreased to 9.5% by the first quarter of 2014 with many homeowners once again migrating to higher levels of maintenance.
Costs are rising …
It remains to be seen if these levels will be sustained as the full impact of e-tolls, rising inflation and the very real possibility of further interest rate hikes comes into play. FNB for its part believes that, although there might be a drop in value-adding upgrades in the months ahead, the full maintenance category will be less affected should the current interest rate hiking cycle prove to be a mild one.
Of course it is important to contextualise these statistics against the reasons that the improvements have been undertaken in the first place. According to the survey, speculative behaviour accounts for approximately 6.5% of current total home improvements. In early 2006, it was estimated that this accounted for 24.5%. The overwhelming majority (76%) still improve their homes for their own use, while 16.5% do it “because they can’t afford to buy elsewhere”.
This suggests that overall, while the percentage of maintenance and improvements has risen, homeowners are being far more conservative than they used to be and are “making do” as opposed to engaging in expensive, arbitrary moves.
This premise ties in to comments made in a recent Financial Mail report which points out that prior to the recession, double-digit house price growth was the norm. Even middle-class families could move house every few years safe in the knowledge that they would make a decent profit on re-sale.
Not so anymore. Today, although the market is healthier, many homeowners have no choice but to hang on to the properties they own, or even downsize. It should come as no surprise then that towards the end of 2013, economists estimated that the lifespan of the average home loan will lengthen to between 10 and 12 years, more than double the norm at the height of the boom.
Ultimately, whatever the case, it’s becoming increasingly important to live within your means and maintain your home. Generally speaking, consistent maintenance offsets large scale, expensive repairs, helps retain the value of your home, creates a good impression and makes it easier to sell when the time comes.