With interest rates at a record low, many homeowners are now trying to make ends meet on the back of home improvements.
While a number of homeowners are doing the basics such as installing a new garden, some are also using home improvement services such as landscaping and building walls.
The cost of an Australian house is set to fall by more than 25 per cent next year.
In Adelaide, which is Australia’s largest city, the average price of a home has fallen by nearly $700,000 over the past five years, according to the Australian Real Estate Institute.
This means the average home in the city is now worth $1,100,000 less than it was 10 years ago.
“We’ve seen some pretty dramatic drops in home prices over the last five years and it’s certainly a concern for a lot of people,” local real estate agent Chris Smith said.
Smith said it was hard to find the right balance between affordability and the amount of work needed.
“You could argue that you could make more money off the back end of your house, so if you are doing an investment property or a house that you are putting into your family and it will get bigger, it might take a little bit longer to get it done.”
It’s a tough balance to strike and I think it’s one that a lot people are not comfortable with.
“But in Sydney, the costs of house maintenance are also being reduced.
According to real estate website Trulia, the Sydney median house price is $532,500, compared to $721,000 in the past decade.
Real estate agent Craig Dutton said while some homeowners might be struggling with the increase in interest rates, he believed there were other factors at play.”
I do think that the real estate market has been really hard on people who are struggling with their mortgage payments and they need to do a little more to get by,” he said.”
And that’s a bit of a double edged sword, because a lot will go out the door for people who have been doing the hard work and not being able to pay off their mortgage.
“There are people out there who can afford a house and a lot are not.
They’re going to do the hard part and if they can’t pay off it, they can do the easy part.
But we’re not quite there yet, and if you’re not living in a home that’s been worth more than $600,000, it’s a pretty tough place to be.”