AUSTRALIANS are turning to renovations as a lack of affordable land and government-imposed costs continued to weigh down on new home building, according to the HIA.
According to the HIA quarterly Renovations Monitor, major renovation activity increased by 6.9% in the December 2006 quarter to $953 million – the first quarter spending has exceeded the $900 million mark since September 2004.
HIA’s chief economist Harley Dale said relatively steady house prices and a strong labour market created a healthy base for major renovations in 2006.
“Expenditure on major renovations was up for 2006 overall, the first rise in three years. At the same time new housing affordability suffered under the weight of high land prices, large development and regulatory costs, and higher interest rates.
“The high cost of new housing has pushed many households into embarking on major structural renovations of their existing property rather than building a new home,” Dale added.
In the three months to December major renovations expenditure increased across
Spending rose by 18.3% in the
Dale said this is positive news for building materials manufacturers and suppliers given the continued struggle for the new housing sector.
“The average amount households are willing to spend on a major renovation grew by 11% in the December quarter and increases were seen across most renovation categories,” he concluded.
Australian Property Journal