'Fragile' renovation recovery continues

New research from the Housing Industry Association (HIA) has revealed that total renovations activity has increased across Australia for the second consecutive year.

The 2015 calendar year saw renovation activity total $30.38 billion in volume, representing a 4.4 per cent increase on the 2014 calendar year, according to HIA's latest edition of Renovations Roundup.

This comes after a sharp downturn in 2011-2013 when renovation activity declined by 15.6 per cent.

HIA senior economist Shane Garrett said while a surge in renovation activity is evident, there are still areas of concern.

“The recovery remains quite fragile and there is considerable geographic variation to activity,” Mr Garrett said.

“Several markets are benefitting from the improving labour market along with stronger dwelling price growth.

“In other places, weak earnings growth, relatively low turnover of established houses and tighter credit conditions are holding activity back.”

The Australian Capital Territory recorded the biggest surge in renovation activity over the 2015 calendar year at 11.4 per cent.

This was followed by Western Australia at 10.3 per cent, Queensland at 8.8 per cent, the Northern Territory at 4.5 per cent, Tasmania at 4.0 per cent and New South Wales at 3.3 per cent.

Victoria and South Australia saw declines in renovation activity in 2015 at 0.5 per cent and 0.3 per cent respectively.

The Renovations Roundup report found repairs and maintenance were the most common types of jobs being undertaken during the 2015 calendar year, followed by kitchen and bathroom renovations.

“A significant 24 per cent of renovation jobs fall within the value range of $12,000 to $40,000,” Mr Garrett said.

“The survey also found that 13 per cent of renovation jobs fell in the range of $200,000 to $400,000.

“This reflects demand for comprehensive renovation work which covers a large part of the footprint of an existing house and is an area of the renovations market that should gather momentum in coming years.”

Looking ahead, HIA predicted that the pace of growth in renovations will ease over 2016, with a slight increase of 0.7 per cent forecast.

[Related: Sydney's property prices buck trend]

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