Canberra homes primed for renovation: HIA report

A renovation renaissance is tipped for Canberra after three years of negative growth in the sector, an industry report has revealed.

The Housing Industry of Association’s Renovations Round-up Winter 2016 report, released on Friday, showed renovations activity was projected to fall by 1.2 per cent during 2016, before three years of solid growth.

HIA ACT executive director Greg Weller said the renovations sector recorded negative growth between 2012 to 2015, however a upturn was expected for the next three years.

“The ACT has had relatively low [house] price growth compared to the rest of the country,” Mr Weller said.

“House prices have started to recover, which is good for renovation activity.”

He said a number of other factors also influenced the positive outlook for Canberra’s renovation market.

“One of the underlying factors and one of the biggest factors is the historically low interest rates,” Mr Weller said.

“The low cost of borrowing, an increase in house prices and generally strong employment in the ACT puts us in a fairly good position.”

According to the report, the greatest challenge for the ACT renovations market is a sharp reduction in the sale of established houses and a decline in the number of homes of a prime renovation age.

Mr Weller said renovation activity generally started when a property was between 10 to 20 years old.

“The most popular areas for renovation are kitchens and bathrooms, and the average age tends to be around that 15-year mark,” he said.

“So the renovation sector is often driven by what happened two decades ago and what’s occurred in that time frame.”

With these factors taken into account, renovations activity is projected to expand by 4 per cent in 2017.

Further growth of 3.8 per cent and 1.7 per cent is expected for 2018 and 2019, respectively.

These figures indicate the ACT’s renovations market could expand from $364 million in 2016 to $401 million in 2019.

“If we can meet the forecast for 2019, that will put us at the highest renovation level in a decade,” Mr Weller said.