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A senior economist has revealed that the home renovations market is currently worth $31 billion and could rise further as new home building “falls back” over coming years.
In its recent Renovations Roundup, the Housing Industry Association reported that the volume of home renovation activity increased by 4.7 per cent in 2015, the strongest growth since 2010.
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The association predicted that activity will grow by another 3.0 per cent this year, with the volume of renovations anticipated to increase from $31.4 billion in 2016 to $33.4 billion in 2019 – an overall expansion of 6.3 per cent.
HIA senior economist Shane Garrett predicted that there will soon be “increased reliance on home renovations as a source of demand within the industry”, which will occur as new home building “fall[s] back over the coming years”.
“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,” Mr Garrett said.
“Our renovations market survey also indicates that the price of houses in Sydney and Melbourne is persuading home owners previously considering moving house to instead embark on major renovation projects in their current homes.”
Mr Garrett said 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,” he concluded.
[Related: New home lending ‘steadily trending higher’]
