More Australians to Renovate Their Houses in 2018-2020

More households will renovate their properties between 2018 and 2020, according to a Housing Industry Association (HIA) report.

Construction activity will decline during the same period, but the rebound in renovation work means more business for homebuilders. As early as now, it’s best to look around for great deals from bathroom or kitchen unit suppliers such as Jayfurn Industries

Reasons for Growth

The HIA report cited a backlog of overdue projects and more properties due for renovation as some of the reasons for the expected growth. The projected value of the market will likewise increase to $34.7 billion from the current value of $32 billion.

Residential contractors should aim to take a slice of this bigger market by knowing the most commonly renovated parts of the house. Most households remodel their bathrooms and kitchens partly because these areas have fixtures that are most vulnerable to wear and tear. Others renovate these rooms due to the significant value that it can add to their homes.

Renovation Spending

Australians spend around $16,900 on average for kitchen renovations and $12,460 for the same work on their bathroom, according to an analysis. It showed that these projects tend to provide the highest return on investment, so homebuilders should expect demand for such work to increase in the next two years.

The analysis, however, found a surprising practice among homeowners who spend on adding a new pool. Despite the insignificant value that it offers, many spend an average of $21,429 on a swimming pool. This accounted for the most significant expense for any homeowner’s budget, although the return on investment isn’t as high as one may expect.

Homebuilders and contractors should focus more on offering renovation services, given that the demand for housing improvements will be stable in the next few years. How does your business plan to expand market share in the upcoming renovation trend?

Despite Fewer Permits, Stats NZ Expects Better Trends for Apartments

apartment being constructed

Statistics New Zealand (Stats NZ) believes that a year-over-year decline in building permits for October will not dampen growth prospects for the apartment market.

Melissa McKenzie, Stats NZ construction statistics manager, described the fewer number of approvals not as part of a market slowdown. New building approvals totalled 2,549 in October, down from 2,575 in the year-ago period.

Modest Improvement

Industry analysts suggested not being concerned about the decline in consents. The Economist Infometrics, for instance, believes that housing supply slightly improved despite the recent decrease in apartment approvals. Construction equipment rental suppliers may still notice a steady demand for services, particularly in Auckland where total dwelling consents rose 19% in October year over year.

Economist Infometrics also expects permits in Auckland to continue rising in 2018, although a shortage of construction workers presents some challenges in deploying more residential properties. According to Statistics NZ, stand-alone homes accounted for the largest spike in permits in Auckland. In other cities such as Wellington, residential construction activity has been on an upswing as well.

Wellington Homes

Stats NZ said that home construction in Wellington rose 33% to $956 million in September year over year. New properties such as homes, apartments, and retirement villages comprised $704 million of building activity, while renovations accounted for the remaining amount.

On the other hand, non-residential construction amounted to $759 million, up 19% from September 2016. The overall value of construction work reached more than $1.7 billion, which represented a 27% increase. Given these numbers, Wellington outpaced any other region in New Zealand for construction activity in 2017, according to McKenzie.

Despite the drop in new apartment consents for October, the upbeat sentiment among analysts and strong performance of some cities indicate stability for New Zealand’s property market.