Renovations slowdown in 2017 predicted to continue through to 2018
The Housing Industry Association (HIA) has claimed that due to a reduction in home sales and low wage growth, renovation activity slowed down this year.
Mentioned in the HIA Renovations Roundup report for December 2017, home renovations fell by 3.1 per cent, with a similar fall predicted for 2018.
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The report, which consisted of a survey of 595 renovation businesses Australia-wide, has HIA senior economist Shane Garrett saying that “sluggish wage growth” is predominately holding back home renovations.
“Because renovations activity is often initiated by the new owners of older homes, the dip in established house turnover over the past 12 months has not accelerated renovations activity this year,” Mr Garrett said.
Mr Garrett predicted that while the short term will see less renovations, the medium term holds stronger prospects for activity, with a 3.2 per cent rise in activity, followed by 5.7 per cent in 2020 and 0.9 per cent in 2021, which is estimated to bring the value of the home renovation market up to $35.57 billion, up from $33.36 billion this year.
“Interest rates are set to remain lower for longer than previously expected,” he said.
“The ageing of Australia’s dwelling stock will also work in favour of renovations demand – the number of houses in the key renovations age bracket of 30 to 35 years is going to rise substantially until the early part of the 2020s decade.
“Even though current conditions in the renovations market are marking time, the HIA renovations market survey suggests that 40 per cent of firms still intend to take on extra employees over the next 12 months.”
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