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Renovation demand remains high despite rising cost pressures
Australia’s appetite for renovation has continued to grow despite fluctuating material and goods costs, as home owners look to add value to their properties.
According to recent National Australia Bank (NAB) data, Australia’s renovation market continued to perform strongly despite the economic headwinds posed by the war in the Middle East.
NAB found that renovation loan demand had risen by 16 per cent year-on-year nationally to 30 April.
The data also showed that the major states across the country experienced strong growth in the renovation loan market, with Queensland leading the way, recording a 25 per cent jump.
Western Australia and South Australia followed, with loan growth of 17.9 per cent and 15 per cent, respectively.
Additionally, Victoria and NSW both saw double-digit growth in their renovation loan percentages, with Victoria rising by 10.8 per cent and NSW not far behind at 10.7 per cent.
NAB executive, home lending, Denton Pugh, said that while demand for renovations was continuing to perform strongly, households needed to plan for price volatility before undertaking their own projects.
“We’re still seeing demand for renovations, with lending up 15 per cent in the past month alone, but the risk is costs could begin creeping higher again as fuel prices flow through to building materials and labour,” Pugh said.
“Renovations remain a great way to add value, but in the current environment, it’s important to plan ahead, build in buffers and stay flexible as conditions change.”
For home owners looking to invest in a renovation project, Pugh said there were several key measures they should take to protect their financial prospects.
He said that by including a 10–20 per cent price buffer in their budget and locking in quotes wherever possible, investors could begin to safeguard themselves from market fluctuations.
Additionally, he said that home owners should plan around easy-to-source materials, wait until the materials are on site to avoid delays, and focus on upgrades that reduce ongoing costs.
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