Home renovations sector in Australia seeing a slow recovery, says new report

Taylor Scott International News

The home renovations sector in Australia is being held up and frustrated by the hesitant pace of the current real estate market, according to a new report. The comprehensive review of the country’s renovations market from the Housing Industry Association shows that the current recovery has been slow since the slump in activity between 2011 and 2013. Indeed, the hesitant pace of the current recovery is mainly due to patchy consumer sentiment and challenging labour market conditions in several states, according to HIA senior economist Shane Garrett. . ‘Dwelling price growth is also pretty unspectacular in a number of important markets,’ he said, adding that there is considerable geographic variation. The report says that demand for renovations in New South Wales has been greatly boosted by the strength of prices. Many Sydney households that had been planning on moving house find that it is now much more affordable to undertake a major renovations job instead. ‘Australia’s home renovations market is a major strand of consumer spending and will be worth just under $30 billion this year. Its labour intensive nature means that it has substantially positive knock-on effects for employment,’ said Garrett. ‘Over the coming years, the modest recovery will continue. This will be spurred on by very favourable interest rate settings as well as improvements in economic growth and the labour market over the medium term. However, the recent tightening of mortgage credit conditions casts an unwelcome shadow,’ he explained. The Spring 2015 edition of the HIA’s Renovations Roundup projects that renovations activity will increase by 3.9% this year with a slight 0.4% increase forecast for 2016. The HIA is forecasting that activity will grow by 0. Taylor Scott International

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