As I mentioned yesterday, the increase in upgraders is having a positive impact on industries other than just real estate, and is providing stock that first home buyers are in the market for. But for those who are feeling the effects of the global recession, another trend amongst home owners is beginning to take shape, and its that of renovators.
Renovation has always played a big part in real estate. People renovate in order to sell with the hopes of achieving a higher price, and many people buy with the intention of renovating. What we are seeing now is the continued popularity of renovation, but it's so people can stay in their current home for longer. The current economy has resulted in many people spending more time at home – something Foxtel has cleverly worked into their current advertising premise – and therefore many are renovating to make that home their ideal.
This trend is becoming particularly prevalent in the USA where home values have been hit much harder than on our own shores, and it means that many small business owners are seeing an increase in demand for their services. The equivalents of the likes of Bunnings and Mitre 10 are expected to show these benefits also when they announce their first quarter earnings later this week. Some companies are saying they've seen the biggest increase in sales month over month for the last year and a half.
Realistically most people are still renovating with a final sale in mind, it means they enjoy the home they're in now, but ultimately will hopefully add to the value of their home when they do come to sell.