Interest Rates Help Lift Renovations Higher

The Winter 2015 edition of Renovations Roundup has been released today by the Housing Industry Association.

The detailed report is the most comprehensive review of the state of the Australian renovations market, including coverage across each of the eight states and territories. Renovations Roundup includes results of the exclusive HIA Renovations Survey which was conducted during August 2015.

“Over the past year, extremely low interest rates have helped drag the renovations market back onto a path of growth. The volume of home renovations is estimated to have increased by 1.2 per cent during 2014,” Shane Garrett added.

“Demand for home renovations is extremely sensitive to consumer sentiment, and the post-GFC downturn provides sobering evidence of this.”

“The 2011-13 renovations downturn was the third worst on record, involving a reduction in activity of 15.6 per cent,” explained HIA Senior Economist Shane Garrett.

“However, more recent strong dwelling price growth has lifted home equity in the Sydney and Melbourne markets, the local renovations industry reaping the benefits.”

“Other markets, however, continue to suffer from the combination of subdued dwelling prices and low household sentiment. The burden of red tape and regulation is also frustrating growth in the market, with nearly one half of renovators identifying taxation and government charges as a serious source of cost pressure,” Shane Garrett pointed out.

The Winter 2015 edition of Renovations Roundup projects that renovations activity will increase by 4.5 per cent this year with a slight 0.4 per cent increase forecast for 2016. During 2017, it is forecast that activity will grow by 1.8 per cent followed by a 3.4 per cent increase in 2018, bringing the total volume of renovations activity to $31.23 billion.