Aussie renovations market in for a slow recovery

The Housing Industry Association’s Spring edition of Renovation Roundup has today predicted a slow recovery in the renovations market after a recent slump.

Providing coverage across all eight states and territories, Renovation Roundup is a comprehensive review of Australia’s renovation market, based on data from almost 600 survey participants. After a slump in the period between 2011-2014, the market has been recovering at a slow pace, due mostly, said HIA senior economist Shane Garrett, “to patchy consumer sentiment and challenging labour market conditions in several states.”

There are certain geographic exceptions to the rule however, with the renovations market in NSW picking up dramatically. Sydney home-owners in particular are now finding it more affordable to undergo major renovations, rather than buy new homes.

RELATED: The best way to fund your home renovation 

Renovations are big business in Australia, and the HIA estimated the industry will be worth “just under $30 billion this year”, although compared to a 2011 high of just over $33 billion, it’s clear the market’s recovery is slow-going.

The Roundup projected a 3.9% increase in renovation activity this year, bumping up by another 0.4% in 2016. Garrett said that “spurred on by very favourable interest rate settings as well as improvements in economic growth and the labour market over the medium term”, the market will continue to improve, with an increase of 0.6% in 2017 and finally, 3.0% the year after. This brings the total worth of renovation activity into the realm of $30.62 billion by 2018.

If you’re looking to get on the once more rising trend of home renovation, one of the options to pay for it is a personal loan. Here are some tips for scoring yourself a competitive deal and getting that new kitchen you’ve been dreaming about:

1. Put up an asset as security

If you have property, a car, or expensive household items, you may have an asset that can be put up as collateral on a personal loan for a better deal. But keep in mind, this means that if you forfeit on the secured personal loan, the lender may seize your chosen collateral in order to recover their loss.

Take for example, the 8.49% interest rate on secured loans, as is being offered by one of the big four at the time of writing, and compare it to their much higher 13.90% rate on unsecured loans. If this doesn’t seem like such a big deal consider this scenario: on a $20,000 loan over a period of four years, this lower rate would save you $2,527 in interest.

2. Consider a challenger brand

Banks incur huge costs through things like branch upkeep, staff wages and shareholder dividends. These days there are many online only or peer-to-peer providers who are able to cut down on these costs to offer competitive personal loans to Australian consumers.

If you’re okay with managing your personal loan online, then consider challenger brands who are often offering cheaper personal loan deals than the big banks.

3. Bring across other products

Another way to bring the cost of a personal loan down is by bringing some of your other banking products into the deal, for example your credit card, savings account or bank account, particularly if you are more comfortable staying with the bigger banks. This is called bundling, and you may find that with this method, the lender will agree to forgo the personal loan application fee, or give you a more competitive interest rate.

Want to find the perfect personal loan for you? Compare deals in our personal loan comparison hub here.