In recent research by the Master Builders Association, there could be a NSW home renovation boom. Despite the economic challenges Australians are facing, conditions are now more favourable for homeowners to invest in the renovation projects they have been dreaming about. A large proportion of this housing stock is 30 or more years old and ripe for renovation. And as rising interest rates continue will home buyers be more likely to invest into these older properties?
There is no question that the interest rate hikes have impacted the new home-building sector. As of March 2023, in NSW there are only 2599 new home Building Approvals, down 32.4% from January 2022. (Master Builders Australia, Building and Construction NSW, March 2023). Together with everyday cost of living constraints home buyers are thinking twice about the cost of building a new house.
The question is, do rising interest rates affect the Home Renovations market? The answer is clear in the fact that as of March 2023 in NSW $326.6 million is being spent on Home Renovations, which is up +9.6% from January 2022. (Master Builders Australia, Building and Construction NSW, March 2023). With the renovation market growing, now is the perfect time to rethink your business strategy.
Looking at the NSW home renovation boom
In Sydney, we take a deeper look into where the homeowners are spending the most on renovations. The current total greater Sydney value of approvals for major home renovations is $2,257,671,700 (ABS Total value of building approvals for residential alterations, additions and conversions: July 2022 to April 2023). In no particular order, these are just some of the suburbs:
|Suburb||Total value of approvals for major home renovations ($)|
|North Mosman – North||$20,758,500|
|Avalon – Palm Beach||$35,756,400|
|Manly – Fairlight||$28,730,900|
|Gordon – Killara||$18,582,200|
|East Rose Bay – Vaucluse – Watsons Bay||$43,318,500|
|Coogee – Clovelly||$24,232,800|
|Bondi Junction – Waverly||$13,898,100|
|Randwick – North||$18,869,500|
|South Hurstville – Blakehurst||$7,454,000|
|Cronulla – Kurnell – Bundeena||$15,426,900|
|Haberfield – Summer Hill||$17,939,400|
|Petersham – Stanmore||$24,523,100|
|Five Dock – Abbotsford||$12,218,700|
|Dural – Kenthurst – Wisemans Ferry||$15,755,100|
|Kurrajong Heights – Ebenezer||$7,877,300|
|Pennant Hills – Cheltenham||$9,191,000|
|Baulkham Hills – East||$7,705,200|
|Guildford West – Merrylands West||$25,354,300|
|Springwood – Winmalee||$7,266,600|
|Blaxland – Warrimoo – Lapstone||$6,752,700|
|Camden – Ellis Lane||$8,110,500|
|Bradbury – Wedderburn||$12,007,800|
|Picton – Tahmoor – Buxton||$8,132,400|
|Bonnyrigg Heights – Bonnyrigg||$4,722,600|
|Erina – Green Point||$7,868,200|
|Umina – Booker Bay – Patonga||$8,676,200|
|Avoca Beach – Copacabana||$7,879,100|
|Terrigal – North Avoca||$11,183,100|
These figures only include values for renovations where the work is substantial enough to necessitate building approval from the relevant local government which means the total market has an even larger potential for business growth and opportunity.
In 2023 more favourable weather predictions are expected with the La-Nina rain pattern well and truly behind us. This means fewer interruptions for renovations. The availability of most building materials is also reported to recover in 2023. Although there are indications that some upmarket products in tapware, hinges, door furniture and tiles could still be an issue with ordering timeframes. We recommend checking with suppliers of materials for availability and cost before committing to kitchen and bathroom designs.