Following a slump in renovation jobs this year, HIA are predicting the home renovation market will return to growth from 2018 onwards.
The July 2017 edition of the Housing Industry Association’s Renovations Roundup report reveals forecasts and figures for the $32 billion Australian home renovation market.
HIA principal economist Tim Reardon says 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.
“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.”
The report predicts 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.
HIA conducted surveys for the report, with businesses saying they regard conditions in the renovations industry over the past year positively and suggesting a modest increase in the amount of work they have 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,” Mr Reardon said.
“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.”