South Africans still conservative about renovations

By Staff Writer

The property market might slowly be returning to normal but, according to FNB's latest residential property outlook, South Africans are still hesitant when it comes to adding valuable upgrades to their existing homes.

According to the report by FNB, in the second quarter of 2010 only eight percent of homeowners were believed to upgrade or renovate their homes. Back in 2004, when FNB first started their residential property survey, 40% of homeowners were making renovations to their homes.

FNB property strategist John Loos believes that the this is because many households have had to curb their spending as the country's economy continues to recover from a recession.

"‘Restricted access to mortgage credit has no doubt also placed a dampener on value-add building activity," Loos told Poperty24.com.

"In addition, South Africans may be loath to invest extra cash in renovation projects given the current weak house price growth outlook."

"In the boom years it was easy to recoup money reinvested in residential property through rapidly rising house prices. But the significant slowdown in house price growth since late 2008 means it has become far more difficult to recoup renovation expenses.

"There may therefore be a view among many homeowners that other investment avenues may yield better returns."

Figures from Statistics SA confirm that money spent on renovations has taken a dive. Completed building plans for additions or alternations to already existing homes dropped by 26% from January to March 2010 year-on-year.

This is bad news for building contractors since they are already feeling the effects of the lack of contracts for new home building activity. Stats SA report that the value of new residential buildings completed from January to May 2010 dropped by 24.5% year-on-year.

Townhouses and flats have been hit the hardest, the number of new sectional title units completed between January and May 2010 is down by a staggering 54% year-on-year.

Recent Articles

Featured Request your credit report from the right bureau

With so many different credit bureaus in South Africa, it may be difficult to decide from which one to request your credit report. We have a look at what you should be aware of when selecting a credit bureau.

Applying for a home loan? Consider the repo rate

When you apply for a home loan, one of your top priorities should be to secure a low interest rate. In order to achieve this, you need to be familiar with the repo rate. We find out more about this.

Effective financial planning as a single parent

As a single mom or dad, it can be challenging to keep up with the ever-increasing expenses of raising a child. We have a look at the importance of setting up a budget as a single parent.

How your credit score impacts your insurance – and vice versa

Since insurance is paid in advance, it may seem unrelated to your credit score. However, these two are in fact linked to one another. We find out why insurers look at your credit score.

Deals

Get a FREE flight ticket with Hotel Sky

Price: From R5,200
When: Until 31 January 2022
Where: Johannesburg and Cape Town

Voucher for 2 special at Bakwena Day Spa

Price: From R1,798
When: Until 31 January 2022
Where: Centurion, Hartbeespoort and Stellenbosch

Spier Hotel Summer Special

Price: Available on request
When: Until 31 March 2022
Where: Stellenbosch


Latest Guide

Guide to debt rehabilitation solutions