Renovations On the Up

It is predicted by some commentators that in the coming months there is going to be a marked increase in the number of people undergoing renovations of their homes.

This may not necessarily be a major overhaul like adding another level, but could be anything such as adding a room, modernising kitchens and bathrooms, or even re-painting.

rpdata.com recently compared Australian Bureau of Statistics (ABS) data for June 2009 to June 2010 and found that the total value of building approvals for alterations and additions (including refurbishment and conversion) had increased by 13.8 per cent to more than $520 million for the month.

What is interesting, however, is that despite the increase in the total value of building approvals for alterations and additions, housing finance data showed that owner-occupiers had actually committed to 12.2 per cent less finance for alterations and additions than they did 12 months ago.

This seems a contradiction. So what is actually going on? rpdata.com says that the increase in building approvals data suggests that major renovations are still occurring, but that these projects aren’t requiring finance.

It will be interesting to see how these figures pan out over the next year or so to see if the trend continues.