Renovations market takes a turn for the better

Homeowners may be more likely than ever to try their hand at renovations, as activity in the sector has finally started to pick up pace. The Renovations Roundup from the Housing Industry Association (HIA) shows that the market suffered slightly following the global financial crisis, but this is a trend that is now starting to reverse.

"Latest indications suggest that the market is starting to turn for the better, with renovators modestly optimistic for the year ahead," said HIA Senior Economist Shane Garrett.

He noted that the low interest rate environment is helping to boost levels of confidence, giving homeowners the incentive they need to carry out projects. Not only this, property prices are rising across the nation, potentially encouraging people to stay in their existing homes rather than move elsewhere.

Whether homeowners are trying their hand at DIY painting or renovating the bathroom, the HIA believes this activity will expand in the medium term. New South Wales and Queensland have both been identified as the two major performers in the renovations market, with their success likely to continue into 2015.

"From now until 2018, renovations activity will expand by about 10 per cent. This will take the value of the renovations market to $31.25 billion," predicted Mr Garrett.

Demand for subcontractor labour is likely to remain high over the coming months, especially for those projects that homeowners may find difficult to complete themselves.

The idea that more people are looking to improve their existing homes was recently reaffirmed by data from the Australian Bureau of Statistics (ABS). In October, the seasonally adjusted amount of loans granted for refinancing established dwellings increased 0.4 per cent from the previous month.

With more affordable home loans on the market as a result of the low cash rate, this trend might not come as much of a surprise to property analysts.