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Renovations will keep builders and developers busy at a time when new home approvals fell for the 17th consecutive month to February.
Master Builders Australia’s national manager of economics and housing, Matthew Pollock, said: “The fall in new starts is a good indicator that new housing commencements are likely to moderate towards the latter half of 2018.
“However, approvals for renovations continue to perform strongly… laying the foundations for a forecast boom in alterations and additions over the next five years,” Mr Pollock said.
The value of residential alterations and additions rose 4.9 per cent to $8.3 billion in the past year.
There has also been stronger demand for detached houses, totalling a 2.3 per cent rise from January to February this year, totalling 10,251 approved houses.
The building of houses bucks the downward trend in building approvals in Australia, which fell 3.2 per cent to 224,200 from 241,580 during the 12 months to February 2018.
Indeed, high-rise approvals suffered the greatest dip over the 12 months to February. There were 60,400 approvals for building units of four storeys or higher, down 15 per cent from 71,049 a year earlier.
Capital economics Australia and New Zealand economist Kate Hickie said: “Although some fall back in building approvals always seemed likely, the decline was larger than expected.”
However, renovations seem to be strengthening the building and construction industry figures, as AMP Capital chief economist Shane Oliver said: “Solidly rising approvals for alterations and additions suggest that total dwelling construction activity may actually grow a bit over the year ahead.”
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