Home renovations hit 14 year high

“Australia’s home renovations sector enjoyed its busiest quarter in 14 years during the three months to September 2018,” said Master Builders Australia’s Chief Economist Shane Garrett.

“While GDP grew by a fairly disappointing 0.3% during the September 2018 quarter, home renovations activity provided more cheer. The volume of renovations work rose by 4.5% during the quarter alone and was 11.0% higher than a year ago,” he said.

“Times have often been tough for Australia’s home renovations market over the past decade but today’s figures show that the market is now bigger than at any time since mid-2004,” Shane Garrett said.

“While new home building scaled new records over recent years, the performance of renovations activity has been quite puzzling and had failed to replicate this strong performance,” he said.

“The stronger position of the renovations market during the September 2018 quarter is linked to the fact that interest rates are very low and remarkably stable at this time,” Shane Garrett said.

“The tightening of credit conditions have prevented many families from being able to move house over the past year. It seems that some of those have decided to renovate their existing home instead,” he said.

“Australia’s home renovations industry may be an unintended beneficiary of the tougher lending policies,” Shane Garrett said.

“Looking further out, we are almost certain to see further gains for home renovations. More detached houses were built in late 1980s Australia than at any time before or since. More and more of these will be begging for major renovations work in the coming years,” Shane Garrett said.