The housing sector is leading Victoria’s building boom, with a record number of houses under construction or renovation. Recent data from the HIA has provided some welcome hope for the construction industry, with promising job forecasts for the coming years.
Detached dwellings (houses) have rocketed to the forefront of Australian’s building behaviour.
As of March 2021, over 35,000 new houses had commenced builds across Australia, almost doubling the commencement rate for all other dwellings. The figures mark the highest rate of house build commencements since March 2000.
And while the trend is expected to carry into the next year, HIA Economist, Angela Lillicrap, warns the boom will inevitably subside.
“Despite the strong outlook for the next twelve months, without a return of demand for new housing from overseas migration, there will be a decline in new home commencements over the next few years,” she said.
“Even with overseas migration re-starting next year, the volume of new home commencements will not be sustained.
“A decline in commencements of new homes should be anticipated from mid-2022 when homes initiated by Home Builder are reaching completion.”
Renovation Rise
COVID’s impact has seen a surge in home renovations too, as Australian’s spend more time than ever confined to the home.
“The renovations market is also mid-way through a record year. Unlike detached home building, we expect that this trend will continue for a number of years due to the elevated savings and increased time spent at home,” said HIA Economist, Angela Lillicrap.
And given the 200+ days of lockdown Victorian’s have been subjected to, it’s no surprise the state is shattering renovation records across the board.
The HIA has forecast Victoria will notch $10.5 billion in renovation activity for this year. That’s a 11.8 per cent jump from 2020, smashing the existing record set back in 2018.
“The typical Australian household is saving significantly more than they were before and they are choosing to spend these savings on upgrading their homes,” said HIA Executive Director, Fiona Nield.
“The boom in renovations is partly due to the shift towards online learning and working from home.”
Unlike the fleeting highs of the housing construction market, Ms Neild remains confident the renovation boom will continue its golden era for quite some time.
“We expect that this boom in renovations will be sustained over a number of years given the level of household savings and the shift to working from home,” she said.
“Even when overseas travel returns, home renovations will most likely remain a priority and within the household budget.”
The sting in the tail of the rampant construction and renovation demand is undoubtedly the consequential supply shortage, which Ms Neil says is “seeing demand for labour, land and materials outstrip supply,”.
The renovation boom has encompassed everything from smaller DIY projects, through to full kitchen and bathroom upgrades, or major home extensions.
Kitchen overhauls have marched into the spotlight in recent months, as people embark on extensions and enlargements to fit more appliances.