Latest news with #buildcosts
News.com.au
a day ago
- Business
- News.com.au
Staggering $54 billion spent on Aussie home renovations within the past year
Aussie homeowners are spending $5 billion more on renovations than they were before the pandemic, with a jaw-dropping $54b splashed over the past year. Rising build costs and increasing home values have caused a spike in money spent across the state, with new research showing renovation loans have jumped by thousands since 2019. But the Housing Industry Association (HIA) reveals this spending surge might not see another spike until worker supply meets demand. HIA senior economist Thomas Devitt said 'massive increases in construction and finance costs' were playing out as the renovation market played catch-up with the changing economy after the pandemic. 'The resurgence in activity we've been seeing more recently will be much more reflective of increasing real activity,' he said. 'The cost of renovation projects seems to have stabilised around 40 per cent above pre-pandemic levels.' The HIA predicted rising demand nationwide would cause Aussies to spend an extra $2b annually by March of 2029. Mr Devitt said rising home prices meant renovations were seen as an affordable alternative to buying a new house, with the market was expected to continue growing. However the extent of renovation growth would depend on the supply of skilled labour to meet the demand – especially bricklaying and ceramic tiling. A separate HIA study that estimates potential demand for kitchen and bathroom renovations found homeowners were choosing to renovate their bathrooms first. Across 2024-2025, Australia was estimated to have a renovation demand for around 244,000 bathrooms and 163,000 kitchens. Mr Devitt said this demand was typically determined by the age of the residence. 'Actual demand for renovations may deviate from notional or potential demand, depending on short term variables beyond just the age of the dwelling stock, like housing market conditions, the economic outlook, or policy settings like interest rates and taxes,' Mr Devitt said. Kirkwood and Co. interior designer Georgia Wallace said she found kitchens could keep pace with modern renovation desires more than bathrooms. 'I think if you're going to update a property or your own home, starting with a bathroom renovation is something that definitely lifts a property,' she said. 'It definitely dates faster, so it's something I think more people will be doing.' But Ms Wallace said even a simple bathroom renovation could cost tens of thousands of dollars more than it used to, with more than double the pre-Covid wait times for builders. 'You could be waiting between six and 12 months to lock in builders,' she said. 'It's so hard to get a good tiler locked in.' All up, 40,274 renovation loans were placed by Australians in the past 12 months from March, up by more than 3,000 from the previous 12 months. Quarterly loan numbers in the 2019-2020 financial year were typically around 6-7,000, with 2025's numbers at an increase of about 2,000 per quarter. Mr Devitt said while spending reached a high in 2021, he expected the renovation market to continue at a healthy rise moving forward. 'It may have cooled from the highs of recent years, but it's still going strong,' he said. 'It sustained itself much better than the new home building sector, and is set to pick up again too – from historical elevated levels of real activity, not just value.'
News.com.au
03-08-2025
- Business
- News.com.au
Family leaves newly-made dream home after 'scary' build prices
An interstate family was able to build their dream home on a rare patch of land in one of Queensland's most popular suburbs – but the price was heavier than they expected. Sarah and Marlon Cornell said they realised they and their two kids were outgrowing their Melbourne home, and begun searching for a new place. 'Our babies were Covid babies; they're now 5,' Mr Cornell said. 'We wanted to move somewhere warm, have that outdoor lifestyle. During Covid, winter with kids was really tough, especially in a small home.' After settling on Queensland, the family felt Nundah was one of the best options in their price range. In 2021, two managed to find a patch of land at $750,000, and set to work remotely building their new home. But when they did, they found rising build costs drove up their build by a sizeable fee of 25 per cent. 'When we were dealing with our builder, I wasn't expecting the end price of the build to be the amount that it was,' Mr Cornell said. 'But the builder very quickly reminded us that trades, building materials were all going up, and we were a part of that wave.' 'That time was a bit scary, because you had all these builders every week being announced to be liquidised.' Despite this, the family were glad to buy in Nundah. 'Our research [looked for] crime stats and flood information and school zones,' Ms Cornell said. 'We knew that we wanted Nundah based on that.' 'We built, then we moved up and just went straight in … we were just really lucky we bought on the street that we did. The neighbours are amazing, we've got so many good things.' Now, Nundah is one of Queensland's most popular-selling suburbs. The area saw more sales in the last year than they were days, sitting at 374 apartment sales within those 12 months. Currently, Nundah sits at a median unit price of $666,000 and a median house price of $1,242,500. Place Nundah Agent Jonathan Tesese said with land space limited and 'extremely valued', there was a strong demand for turnkey homes in Nundah's current market. 'We're not making any more land,' he said, 'so for someone to be able to come in and custom build something that fits their lifestyle to a T, it's just what buyers are wanting.' He added that despite rising build prices, Nundah's popularity meant investors were still keen on homes to turn into new projects. 'What we're seeing now is a lot of demand for knockdown homes, post-war homes, or places that can be subdivided,' he said. Seeking a home with a smaller mortgage to get some money back, the Cornell family have decided to sell their place at 1 Villeroy St – but plan to stay in Nundah if possible. 'Nundah's ideal,' Mr Cornell said. 'We wanted to choose a suburb that was relatively close to the CBD … [and] we're pretty spoiled for choice when it comes to schools.' 'Nundah definitely has that family feel. There are heaps of parks, markets and whatnot, people are out and about … you get a sense of community.'
Daily Mail
03-06-2025
- Business
- Daily Mail
Higher costs and planning delays hit MJ Gleeson profits
Shares in MJ Gleeson fell sharply on Tuesday with the housebuilder warning higher build costs and weak home price growth would hurt profits this year. The group, which specialises in affordable homes and promoting land for residential development, also highlighted planning delays it expects to continue to weigh on the business into next year. Gleeson had reported solid first half trade with revenues up 4.2 per cent, while the group highlighted 'encouraging signs of a recovery in demand' with reservation rates up 45 per cent over the first four weeks of 2025. But Gleeson told investors the 'pace of the housing market recovery has not been sufficient' to offset 'a number of headwinds' faced through the year. 'These include increased build costs, flat selling prices, the continued use of incentives and several bulk sale transactions,' It said. Gleeson's full-year guidance had also been based on the expected sale of 'extensive land holdings in East Yorkshire'. But delays to this sale mean the group now anticipates that operating profits within its homes business will be 15 to 20 per cent below current expectations. Gleeson Homes' gross margin for the year to 30 June will likely come in 1 per cent below previous guidance, the group said. The unit's 2026's gross margin is expected to see a similar impact. The group's land business, meanwhile, has completed three transactions to date and working to complete a further seven disposals before the year end. Warning signs for the sector? MJ Gleeson shares were down 22 per cent to 402p in early trading, bringing one-year losses to around 28 per cent. The update also weighed on the shares of rivals like Persimmon and Vistry Group, which were down 1.4 and 1.9 per cent, respectively. Analysts at Peel Hunt said: 'There are obvious questions about the read-across to the wider sector. Our sense is that, despite increased affordability, some of the net margin pressure described above will likely be felt across the sector, as the new build market competes with a second-hand sector seeing high stock levels. 'Similarly, planning issues impact all players. We continue to believe the sector needs to see demand-side support to see a material uptick in housing supply.'
