Home ren­o­va­tion mar­ket gets a makeover

Australasian Timber - - NEWS -

HIA PRIN­CI­PAL Econ­o­mist

Tim Rear­don be­lieves the home ren­o­va­tions mar­ket will re­turn to growth this year.

The July 2017 edi­tion of the Hous­ing In­dus­try As­so­ci­a­tion’s Ren­o­va­tions Roundup re­port (which pro­vides a reg­u­lar in-depth re­view of Aus­tralia’s $32 bil­lion home ren­o­va­tions mar­ket) re­veals the re­sults of the lat­est home ren­o­va­tions sur­vey and out­lines fore­casts for home ren­o­va­tions ac­tiv­ity on a state-by-state ba­sis.

“Even though new home build­ing ac­tiv­ity has soared to record lev­els over the past 12 months, con­di­tions for the ren­o­va­tions mar­ket have been much more sub­dued,” Mr Rear­don said.

“We ex­pect this to change this year and that the mar­ket will again ex­pe­ri­ence growth as the num­ber of de­tached houses that are reach­ing the key ren­o­va­tions age is in­creas­ing.

“Our sur­vey re­sults also in­di­cate that busi­nesses re­gard con­di­tions in the ren­o­va­tions in­dus­try over the past year pos­i­tively and sug­gest a mod­est in­crease in the amount of work in the pipe­line.

“The en­vi­ron­ment of record low in­ter­est rates and strong dwelling price growth in key mar­kets has cer­tainly been a plus for ren­o­va­tions de­mand but fall­ing trans­ac­tion vol­umes in the es­tab­lished house mar­ket have held ren­o­va­tions ac­tiv­ity back.

“Over the longer term, ren­o­va­tions ac­tiv­ity is set to grow mod­estly as a re­sult of the back­log of over­due jobs as well as more homes reach the key ren­o­vat­ing age. With new home build­ing set to de­cline over the next cou­ple of years, the grad­ual strength­en­ing of ren­o­va­tions ac­tiv­ity is com­ing at the right time,” said Mr Rear­don.

Fore­casts con­tained in the lat­est HIA

Ren­o­va­tions Roundup re­port pre­dict that ac­tiv­ity in 2017 will be con­sis­tent with lev­els in 2016, be­fore re­turn­ing to a growth phase in 2018 (+2.6 per cent) fol­lowed by an­other ex­pan­sion of 2.3 per cent in 2019. Dur­ing 2020, a 2.4 per cent in­crease is pro­jected to take the value of the mar­ket to $34.71 bil­lion.

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