What homeowners want in 2022

After coping with the COVID-19 pandemic for the past two years, Australians have certainly entered – and embraced – the new normal in 2022. Working from home has helped people find their best location and create multifunctional spaces. And this gives the building and construction sector the chance to adapt and reinvigorate when designing homes. To discover this new direction, get the low-down from Houzz Australia’s managing director, Tony Been.

Why has the millennial age bracket (25-39) become second to the oldest age bracket (55-74) when it comes to renovation spending?

While it’s a big jump, an increase in spending by Millennials isn’t that surprising. They have always been active renovators and as they have grown up, we can see an increase in their spending power. With the current property market in Australia pushing prices higher, it’s led to a trend among Millennials to acquire ‘fixer-uppers’ to gain an entry point. Market conditions have also limited the capacity for some to move into larger properties, which again has led to further renovations to meet their needs.

Are homeowners looking for different elements, such as larger home offices or more technology advances?

As people are working from home and multifunctional spaces are needed, we have seen homeowners make modifications to rooms or zones that can take on multiple activities. Cleverly tucked nooks and dining areas equipped with comfortable seating have taken the role of a home office. 

With advancing technology, home systems have become more sophisticated over the years. We’ve seen strong investment in homes being integrated with smart-tech features. These make everyday tasks simpler, such as automated thermostats, electronics, lights and more. 

Why have kitchens been prioritised over living rooms/family areas nowadays?

Kitchens are one of the most popular rooms to renovate, and this continues to command large renovation budgets, according to the latest Houzz & Home report. This space has seen more action than usual over the past year. We see homeowners on Houzz renovating their kitchens to create a multifunctional space where they cook, entertain and work. 

This resulted in higher investments in kitchen projects, jumping 33 per cent to $20,000 in 2020 compared with $15,000 in 2019. As the kitchen evolves to take on multiple roles, homeowners on Houzz are making major changes for bigger kitchens that can multitask. In our recent Houzz & Home survey, more than half had changed the layout of the kitchen (54 per cent) and two in five increased the size of the kitchen during renovations (43 per cent). One-third of homeowners reframed, moved or added walls (33 per cent). Top aesthetic improvements made to the kitchen include new benchtops, taps and fixtures, cabinets, splashbacks and sinks.

Electricians seem to be the most sought-after in trades. Is this indicative of a greater investment in smart technologies? 

 

We’ve seen an increase in the integration of smart technologies in the home. It makes sense that this demand flows onto the professionals who bring it to life.

 

Our research tells us there has been a spike in homeowners prioritising integrating smart technology. It increased by two points from 12 per cent in 2018 and 14 per cent in 2020. We’ve also seen this reflected in the influx of intuitive kitchen appliances, automated bathrooms facilities and voice-activated home entertainment systems being installed in their homes.

 

What did the Houzz survey reveal about consumer behaviour during the past few years?

 

At the start of the pandemic, we found 83 per cent of home renovation and construction activity was able to move forward. Many homeowners reported that being stuck indoors inspired new projects.

 

With social distancing practices limiting travel and dining out, some personal discretionary spending was redirected towards home renovations. We saw homeowners who claimed to have wanted to do it all along. Finally having the financial means also rose by 35 per cent of homeowners on Houzz compared with 33 per cent in 2019. 

 

The shift of people taking advantage of flexible work arrangements saw a larger share of homeowners wanting to maximise purpose in the spaces they already had. 

How has the pandemic influenced consumers’ style of renovation?

Spending more time indoors forced us to rethink our homes and renovating due to outdated or undesirable design or style was the top concern for outdoors, kitchens and bathrooms among the Houzz community. 

A home needing to quickly adapt between business and personal saw home offices being added or upgraded increase by three points in 2020 from 2019 (13 per cent versus 16 per cent). Nearly a quarter of homeowners claimed to have decorated or furnished their home office in the past year (23 per cent).

Shortly following, wellness and mindfulness in the home became as important as ever. We saw the homeowner community find ways to transform their living rooms, garages and backyards into personal home gyms, as a substitute for the closure of fitness clubs.

Outdoor renovations, such as decking and patio, have seen a large increase. Why did this occur?

The lockdown certainly heightened the value we place on our outdoor areas, as a recent Houzz & Home report found nearly three in five homeowners made sprucing up their backyard a priority (59 per cent).

We understand homeowners looked to nature as a place of serenity away from the chaos of the pandemic. Outdoor improvements directed towards garden beds or borders showed a significant seven percentage point increase among renovating homeowners over the past year. Interestingly, we also saw specific searches for yucca varieties surged by 13 per cent when compared to the previous year. 

Additionally, homeowners craved a place to relax in privacy. This saw fences, decking and patio improvements being among the most popular outdoor upgrades. We’re also seeing an uptick in searches on Houzz for inspiration on pool landscaping, rock gardens and balcony upgrades. 

What other insights did Houzz observe in 2021?

There’s a shift in people wanting and needing to work from home becoming the catalyst for taking on new renovation projects. Reworking our living spaces to accommodate multiple uses is emerging the trend of entangled design. ‘Home-life’ is being reimagined, where rooms are crossing over. 

In the Houzz community, we’re seeing a surge of garages converted into studio-sized bedrooms for guests, but also double as spare entertainment rooms. We’re also seeing designers making the most of compact spaces, with cleverly tucked away workstations under a staircase or customised into cabinetry. Smarter use of space is becoming increasingly important, and we expect to see this trend develop further well into 2022. 

With the world in a (hopefully) post-pandemic state, where do you see the trajectory of home renovations in the next three to five years?

As people embrace a hybrid working model, expect a desire for adaptable homes, with flexible spaces that can support us and provide relief as multiple activities are going on. The changing workforce will see some relocating away from the city into regional towns. This will only increase the demand for a fully personalised home that has room to facilitate an office, a backyard and more. 

How will interior design trends evolve?

With Millennials driving the next generation of renovations in Australia, Houzz community experts understand sustainable construction and design will be front of mind for this market of homeowners. 

Expect trends that centre ‘green’ in practice with smarter energy solutions, and the demand for alternative building materials that are eco-friendly or locally sourced. Kitchen benchtops or cabinets made from recycled or sustainable materials such as wood and natural stone over others is already proving to be popular on Houzz. 

How will the pandemic affect local businesses and trades?

Those who weren’t equipped with the right digital tools to stay on top of their projects – when the pandemic required reduced in-person interactions – needed to lift their business game immediately. 
Our focus is improving the renovation process for everyone involved, and many in the ‘pro’ community have shared how using Houzz Pro tools helped manage and move projects forward during the pandemic. 

Being able to offer virtual consultations, share mood boards or 3D floorplans remotely, allows pros to meet and collaborate with clients safely while building rapport from a distance. They could be ready to commence the next phase of the project effectively and efficiently as soon as restrictions were lifted. 

Looking ahead, the impact will continue to see builds and renovations weather delays, as pros take on backlogged projects that will take months into 2022 to complete. However, we’ve noticed that pros can be selective with new jobs that align with what they do best.

Do some people choose to relocate rather than renovate? 

Our latest Houzz & Home report tells us over a quarter of homeowners claimed to have renovated instead of moving to find a home that fit their needs because it was the more affordable option (two per cent) and renovating to adapt to recent changes in lifestyle also increased in 2020 from 2019 (20 per cent versus 19 per cent in 2019).

We understand homeowners relocating to regions outside major capital cities is driven by an affordability advantage combined with the flexible working policies that allow them to work from anywhere. However, we’ve seen signs of home construction and building activity booming across capital cities and regional areas, with the volume of enquiries being sent to pros, and the pipeline of jobs they’ve been able to commence and resume coming out of lockdown restrictions.

Will renovation activity continue to boom, even in a post-COVID world?

We see that confident renovation activity will continue into 2022 as people find it valuable to invest in their homes for reasons that prevailed before the pandemic, and will do so going forward. Whether it’s boosting a home’s value for sale or accommodating a growing family, it’s important for homeowners to connect with the right pros to help them on this journey. 

The industry has been resilient in overcoming challenges brought on by the pandemic, but it’s also led us into an exciting path of opportunities. The recent years will continue to have an influence on homeowners’ changing needs and the way our living and working spaces will adapt and evolve. 

We can already see construction supply chain industries are becoming more resourceful in finding ways to navigate the month-long delays on building materials needed to fulfil the pent-up demand for home renovations in Australia and around the world. 

Economic insight

‘In the past 24 months, renovations have seen an extremely sharp incline,’ says Tim Reardon, HIA chief economist. ‘As house prices continue to soar at ever-increasing rates, renovations are being seen by many as a more attractive alternative to moving to bigger houses. 

‘If you combine the factors that interest rates are low, borrowing power is high, and people are less inclined to move due to the stress and uncertainty of the behaviour of COVID-19 variants, the resulting move to upscale existing spaces to provide more living space is being seen across every region. 

‘We can clearly see that the Millennials are the driving age group of renovations, second to the 55 to 74 year olds, as they are acquiring the funds that allow them to take on home investments,’ says Tim.

At HIA, we understand that insights and forecasts are important to your planning and success. Our housing predictions and forecasts are based on extensive industry data with methodology created from a mix of the economic fundamentals and real-world data.

For more information and forecasts from HIA’s economics team, visit HIA Housing Outlook or order the latest Outlook reports.