Stagnant building activity and a dwelling shortage of 45,000 could boost renovation activity in coming months as home owners opt to renovate over buying.
The Housing Industry Association’s (HIA) National Outlook, released today, forecast further decline in building activity for the remainder of the year as a result of higher interest rates and building material costs.
However despite the lack of new construction, the Institute said the renovations sector would remain resilient, with total investment activities forecast to reach $30 billion in 2008/09.
Mark Hewitt, general manager of sales and operations at AFG, said renovation activity had been consistently strong for several years and he wasn’t surprised it was set to continue.
“When you look at the cost of buying and selling versus renovations, renovating is certainly a viable alternative,” he said.
The housing shortage is also tipped to push up rental values which may attract investors back to the market but Mr Hewitt did not expect to see a rise in activity any time soon.
Right now Mr Hewitt said the greatest opportunities for brokers lay in refinancing activity and helping borrowers to find the right products for the next rate cycle.
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