Renovations market tipped to exceed $30 billion after prolonged period of weakness
New research from the Housing Industry Association (HIA) indicates there are emerging signs of recovery in the Australian renovations market after a prolonged period of weakness in recent years, which could see renovations investment once again exceed $30 billion.
There are over 9 million private dwellings in Australia which all require regular maintenance due to unexpected climatic events such as cyclones, flooding or bushfires and the natural aging of homes. There are also those who renovate with the objective of reselling the property for a profit, according to HIA.
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After a slow start to the 2013/14 fiscal year, renovations investment has now posted two consecutive quarters of growth through to the March 2014 quarter. There was an 8.2% increase in the aggregate value of renovation jobs approved during the March 2014 quarter.
The June report stated that despite shaky consumer sentiment “leading indicators of demand for larger renovation jobs (those jobs requiring council approval and valued over $10,000) suggest contemporary market conditions are improving.”
“After dropping to decade lows in 2013 there is huge upside potential for renovations activity. While consumer confidence has been relatively subdued, low interest rates and home price appreciation are two important factors in favour of a recovery.”
“This provides some confidence for our forecast of 1.0% growth in the total value of renovations investment in 2013/14 to around $28.6 billion,” said HIA.
The official statistics show momentum is expected to build over the following years with growth of 1.2%, 2.3% and 2.5% in each of the three years through to 2016/17.
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