Home values in some of Australia’s most sought-after suburbs are poised for further increases as billions of dollars in renovations are planned. In June alone, renovation approvals reached a record $1.17 billion, with a total of $12.8 billion approved over the past financial year.

This building boom is being driven largely by affluent homeowners in Sydney and Melbourne. “High-end suburbs are desirable due to their large land sizes and prime locations, making significant investments in homes worthwhile,” explained PropTrack Senior Economist Paul Ryan. The high cost of stamp duty also incentivises homeowners to renovate rather than relocate.

Key renovation hotspots include Point Nepean in Victoria, where $97.5 million in renovations were approved, and Sydney’s Manly and Fairlight, which saw $88.5 million in renovation approvals. Real estate agents observe that many homeowners are investing significantly in their current properties, aiming to make them their long-term residences.

The renovation surge is expected to persist, bolstered by easing construction costs and strong recent home price growth, which is providing homeowners with the equity needed to finance these projects.