Australia’s ageing housing stock may cause a boom in renovations in the next decade as higher interest rates and poor affordability push more homebuyers into older properties.
Analysis from Master Builders Australia finds that proportion of homes 30-plus years old has risen to 55% of housing stock, which equates to 6 million properties.
Housing Industry Association senior economist Thomas Devitt says many of the homes built during the late-1980s building boom are ready to be upgraded as they change hands.
“Renovations tend to be more affordable than entire new homes, depending on the ambition and budget of the renovator,” he says. “Rising interest rates, recent construction cost blowouts and construction code changes are making affordability all the more important. This should shift more demand to renovations over new-builds.”
Renovation activity hit its second-highest level on record through the pandemic, bolstered by government stimulus and excess savings. While spending has fallen in recent months, it is still well above long-term outlays.
Seven in 10 homes in Tasmania are three decades old or older, with a high proportion of homes in NSW (60%) and South Australia (64%) also showing signs of ageing. The ACT and Victoria are the only states where one in 10 homes were built in the past five years.
