Renovations grow as house prices edge up
Home renovations have seen their strongest increase since 2010.
The Housing Industry Association’s (HIA) Renovations Roundup report has found renovation activity in 2016 is estimated to total nearly $31.4 billion. HIA senior economist Shane Garrett said the housing industry was becoming increasingly reliant on home renovations as the pace of new home building subsides.
“Home renovations’ demand has a lot going for it at the moment: low interest rates, a strong pace of dwelling price growth in key areas and healthy labour market conditions in the larger cities. Our renovations market survey also indicates that the price of houses in Sydney and Melbourne is persuading homeowners previously considering moving house to instead embark on major renovation projects in their current homes,” Garrett said.
Garrett said the turnover of existing homes was also generating renovation demand, as new buyers initiate renovation projects for ageing houses.
“Overall, we anticipate that renovations activity will continue to grow modestly over the next few years and take up some of the slack that will result from weaker levels of new home building. With annual home renovations expenditure topping $31 billion, the sector packs quite a punch across the Australian economy,” Garrett said.
The HIA has forecast the volume of renovations activity to grow from its current $31.38 billion to $33.37 billion by 2019.