Renovations on borrowers' back burner

by Adam Smith22 Feb 2012

Homeowners are choosing to put off renovations as they deleverage debt and focus on saving.

Loan Market has pointed to ABS figures showing a 7% decline in refinancing for renovations over 2011. A spokesman for the company has claimed more Australians are prioritising saving and debt reduction over home improvements.

Refinancing, however, is one the rise. While refinancing for renovations is falling out of favour, the number of households refinancing for a better deal was up 20% in 2011, Loan Market said.

The company spokesman claimed the "most significant number" of refinances occurred in the latter half of 2011 as the lending landscape became more competitive and the RBA made successive cuts to interest rates.

"We are expecting the trend to continue through this year," he said.

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