Upgrades, upkeep tumble as belts tighten

HOME maintenance and upgrades fell by the wayside last year as weak economic conditions saw owners cutting back on unnecessary expenditure or postponing spending on their properties where they could.

Not only did estate agents report that less home maintenance and fewer upgrades were taking place, but hardware retail sales and building data also showed declines.

Weak and uncertain economic times can lead to consumers cutting back on unnecessary expenditure, or postponing less urgent expenditure items, says FNB’s Household and Property Sector Strategist John Loos.

“Home maintenance and upgrades often fall into the category of ‘less urgent’ expenditure items than, say for instance, basic foods spending.”

Although the FNB Estate Agents Survey did report spending related to home maintenance and upgrades was better over 2017 as a whole compared to 2016, the levels weakened as the year continued. According to the survey:

Levels of value-adding home upgrades dropped from 26% in Q1 to 25.5% in Q4.

The percentage of homeowners fully maintaining their properties and making improvements declined through 2017, from 36.5% in Q1 to 30.5% in Q4.

Owners not improving their homes but still maintaining them rose through last year, from 27.5% in the Q1 to 31% in Q4.

The percentage of owners attending to basic maintenance increased from 9.5% in Q1 to 11% in Q4, though it decreased from 12% in Q.3

Owners allowing their homes to become run down increased from 0.5% in Q1 to 2% in Q4.

The slight increases in the latter two categories may suggest increases in the levels of financial pressure or constraints, or greater financial caution, Loos says. The decline in two of the highest three categories – value-adding upgrades, and maintaining and making some improvements – contributed to a three-quarter decline in the FNB Home Investment Confidence Indicator.

The sales of hardware, paint and glass products also declined towards the end of last year.

The economic situation therefore poses the question of whether sellers should sell their homes in their current conditions, or fix them. According to Adrian Goslett, regional director and chief executive of Re/Max Southern Africa, this boils down to two things: either delaying the sale and spending to get the property in better shape; or placing it on the market “as is” and taking a knock on the asking price.

“A home in good repair will achieve a far higher selling price than one that needs attention. However, fixing a home will cost and delay the sale process by the amount of time it takes to complete the repairs.”

Goslett says there are buyers who look for houses needing renovation because they are more affordable, and they will be able to renovate the properties to their tastes. However, this is more the exception than the rule.

“In most cases, homes in good repair will appeal to a greater number of buyers and will be sold in a shorter timeframe than a home in need of repair. While it largely depends on the reasons the homeowner is selling and when they need to sell the home by, taking the time to get the home into its best shape could pay off. A visually pleasing home will attract far more attention from potential buyers than one that is not well-kept.”

It is standard practice for sellers to paint homes and see to necessary items that need fixing.