Weakening activity in new home building will be offset by home renovations work over the next few years, according to recent research by the Housing Industry Association.
The latest HIA Renovations Roundup report forecasts an expansion of 2.4 per cent for the renovations market in 2018, with a similar rate of growth projected for 2019.
From an estimated market size of $33.26 billion in 2016, the report anticipates that after decelerating slightly in 2017 (growing by just 0.6 per cent), the volume of renovations activity is to expand by 2.4 per cent in 2018 and a total of 5.5 per cent by 2019 to reach $35.07 billion.
HIA senior economist Shane Garrett remarked that after several years of post-GFC decline, home renovations activity has “turned the corner” and is making a positive contribution to growth in residential building.
“In the Melbourne and Sydney markets, the large increase in dwelling prices over recent years has helped persuade many households that performing a major renovation on their current home is a lot more attractive than moving house,” Mr Garrett explained.
“In other markets, however, subdued wage trends and weak dwelling price growth will make it tougher to achieve growth on the renovations side,” he highlighted.
Mr Garrett also pointed out that he believes renovations activity is “poised to benefit” from a large expansion in the number of detached houses in the 30-40-year age group over the next few years.
“Homes of this vintage are generally crying out for renovations work – great news for those engaged in the industry,” he concluded.
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