ECONOMY | EDITORIAL
HOME RENOVATIONS –
AUSTRALIA’S NEXT
BUILDING BOOM?
DR HARLEY DALE
Chief Economist
HIA Economics &
Australian Construction Insights
T
he latest edition of the HIA
Renovations Roundup was released
last month. This report undertakes
Australia’s most comprehensive ‘pulse-taking’
analysis of the nation’s $30 billion-plus home
renovations market. As well as assessing the
current state of the market, the Renovations
Roundup also provides forecasts of
renovations activity for each of the states
and territories out to the year 2020.
Renovations activity is a very important
component of Australia’s residential
construction industry. The higher end
renovation jobs on offer, which are slowly
coming back into vogue nearly ten years
after the GFC crushed them, represent
considerable opportunities to Australian
Window Association (AWA) members.
Many people are surprised to learn that
the performance of the home renovations
market is not always in step with that of
new home building activity. Indeed, events
over recent years have illustrated this
divergence quite starkly. For example,
while the new home building side of
residential construction enjoyed its largest
and longest ever upturn between 2012 and
2016, renovations activity endured a sharp
contraction between 2011 and 2013 with
the volume of activity falling by more than
14 per cent over the course of two years.
The ensuing recovery was slow to gather
momentum – a snail would have made faster
progress to begin with. However, by the end
of 2016, renovations activity was 8.5 per cent
up on its 2013 trough.
One of the key features of the HIA
Renovations Roundup is that results of
a unique quarterly industry survey are
presented and analysed. In terms of its
reach, the renovations market is a generous
one: the key participants are overwhelming
concentrated amongst sole traders or
small firms, with the glow extending to a
further cohort of subcontractors such as
electricians, plumbers, painters, carpenters
and plasterers. In terms of the specific
types of renovations work done, repairs and
maintenance jobs are the bread and butter
of the market in the post GFC world. Other
important sources of work identified by the
survey include kitchens and bathrooms.
These areas of the house have traditionally
been very popular to renovate and in the
case of a kitchen, a larger square metre
footprint often emerges from the reno job.
The HIA-GWA Kitchens & Bathrooms
Report 2016/17 was released in early April
and provides comprehensive coverage of
activity both in terms of new homes and
kitchen and bathroom renovations work.
One segment of renovations that has
been hard hit in the more cautious post-
GFC world is structural extensions. The
Renovations Roundup survey does provide
evidence that this important component of
renovations activity is again gathering steam,
a finding s