Introduction
Recessions come and go and are considered a natural part of the economic cycle. Throughout different stages of life, you and your household can find yourself in different financial situations, like the current downturn. Renovating might be on your mind with some well-considered upgrades that you have been putting off.
So is it a good time to renovate your home? Indeed, it could be a good time to do it. Here, we’ll uncover some of the best home improvement ideas after explaining why certain renovations are a good idea during a recessionary period.
What is a recession?
Recessions are periods when economic activity declines significantly. This can last for months or years. Recessions can be caused by different factors. These include economic shocks like the COVID-19 pandemic, too much business or household debt, real estate bubbles and asset bubbles like the late-1990s stock market, and too much inflation.
So what happens during a recession?
In technical terms, the country’s economy will have a negative Gross Domestic Product (GDP). GDP refers to the total value of all the finished goods and services produced in the country in a given timeframe. Other indicators of a recession include growing unemployment, declining retail sales, and a fall in construction activity.
It’s no surprise then that recessions and the general state of the economy are always impacting households and their decisions on whether or not to carry out home improvements and upgrades. You and your household might naturally be extra careful about spending during the period of downturn associated with COVID-19. However, smaller renovations can turn out to be excellent investments during recessions for a few different reasons.
The top 3 reasons you should renovate your home during a recession
The best reasons to renovate during a recession include less competition for materials and tradies, less risk, and higher resale value.
Less competition for materials and tradies
Historically, recessionary periods can make excellent times to upgrade your property. The key reason is competition for contractors and materials. There’s less demand for these as people are more cautious about their finances.
As a result, you can find it cheaper to source the labour and materials for your renovation job and end up saving a lot of money. Whether you’re doing home renovations in Sydney, Melbourne, or other cities, you might be able to find high-quality alternatives for everything from concrete to plumbing fixtures at a cheaper price. At the same time, the best contractors might be more readily available so your projects can proceed more quickly.
Improve your home’s resale value
Whether it’s a recessionary period or not, the right home renovations can improve your property’s resale value when it comes time to sell. What’s different about updates during recessions is you could end up getting a bigger bang for your buck. Since you might be paying less for materials and labour, you’re boosting your home’s value for less money.
Renovating has a lower risk than moving to a new home
During a recession, you might be more cautious about making big financial decisions. Renovating offers a safer option than selling your home and buying a new home. Even simple renovations like new lighting or basic bathroom updates can enhance livability, comfort, and functionality without the greater risks associated with moving to a new property.
6 cost-effective, yet value-adding renovations that you can do in the current economic state
Choosing high-ROI projects or smart, cost-effective yet value-adding upgrades is key when it comes to renovating during a recessionary period. Consider these easy projects for your home.
Open up the indoors to the outdoors with modern fly-screen solutions
Adding modern fly screen solutions or fly screens is one of the easiest, simplest upgrades that expand liveability and potentially increase the value of your property. These allow in more natural light into your interiors while letting you enjoy the outdoor views and keeping out the insects. Insect screens are designed to be discreet and open and close effortlessly, even if you have bifold doors and other door or window configurations.
DIY interior painting
DIY painting is another high-ROI update that costs little for the impact it delivers. A good paint job is easy enough to do yourself, so you could save thousands by forgoing hiring a professional. Give your living areas and bedrooms a fresh coat of paint and brighten up your interiors with a fresh new look and feel.
Modernise your bathroom with new fixtures
New bathroom fixtures are an excellent upgrade to consider during a recession. Rather than doing a full bathroom remodel, you can invest in something as simple as updating shelving and storage, taps and faucets, towel racks, lighting, or mirrors.
Slightly more involved are shower, bathtub, toilet, and sink upgrades. These updates can give you a big return on your investment dollars given that your bathrooms are such high-traffic, essential zones in your home.
Replace old flooring with modern floating floors
Could your flooring do with an update? Floating floors are cost-effective and easy to install. This type of flooring uses click-lock or tongue-groove systems that have the boards “floating” above the sub-flooring. It eliminates the need for nails, glue, and a lot of professional equipment.
Floating floors can give you a premium appearance with the durability of hardwoods. Laminates, bamboo, and vinyl are some of the popular materials for modern floating flooring.
Modernise your lighting and ceiling fans
Lighting is a simple, cost-effective way to transform the look and feel of a space. The right lighting instantly makes your rooms more functional and inviting. Refresh your lighting with new fixtures to brighten up darkly lit corners or to create ambiance in different zones.
Ceiling fans, too, can add to enjoyment and comfort in your interiors. They help circulate the air through your home. Ceiling fans can significantly reduce your energy costs for both heating and cooling, through forward and reverse modes. Ceiling fans come in all kinds of designs and can make an aesthetically pleasing addition to your interiors.
Paint your kitchen cabinets
Your cabinets usually go unnoticed even though they take up a considerable amount of space in your kitchen. As such, giving your kitchen cabinets a new coat of paint can be a surprisingly effective update that completely refreshes the look of your kitchen. Experiment with different colours to work out what could work well. Some of the hottest colour trends include neutrals, grayish greens, earthy greens, natural wood, black and white, and blue.
Our verdict
While recessions aren’t a good time to carry out whole remodellings and full internal upgrades, they can be the ideal opportunity to carry out small functional changes that have a strong impact on liveability and enjoyment. These are the small jobs we tend to brush off and delay, even though these jobs can be important for increasing the value of your home. These can be cheaper to do during a recession as there’s less competition for tradies and materials. Such updates can increase the functionality and value of your home while posing less financial risk than moving to a new place.
Consider these simple home improvement ideas and feel free to do your own research like exploring renovation websites and listening to podcasts for more inspiration. At the same time, keep in mind that informed decision-making is essential for the right renovation outcome, so speak to an expert if you’re unsure.
Editor’s note: This article was written in October 2022 and as such data and comments regarding Australia’s current economic status is influenced by the time the article was written and subject to change.
