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Renovations see fourth quarter of growth
Released 23 November 2011

Preliminary Australian Bureau of Statistics (ABS) building figures released today highlight major renovations as a strong point for the building sector.     

The September quarter result for major renovations (alterations and additions) represents the fourth consecutive quarter of growth and took the worth of work done on major renovations to almost $1.9 billion, a new record high.

HIA Acting Chief Economist, Andrew Harvey, said that total seasonally adjusted residential building work done fell by 1.1 per cent to $11.4 billion in the September 2011 quarter.

New residential building work done fell by 1.5 per cent in the September 2011 quarter to be down by 5.2 per cent on the September 2010 quarter while the value of major renovations work done grew by 0.9 per cent to be up by 6.3 per cent on the commensurate quarter one year earlier.

“The 1.5 per cent decline in new residential work done reflects a 2.6 per cent decline in detached housing which was partially offset by a 3.4 per cent increase in ‘other dwellings’. Today’s result suggests that new dwelling investment will detract from GDP growth in the September quarter national accounts, due for release in two weeks’ time,” Harvey said.

“At the national level, new home building has been on a consistent downtrend, while renovations have not only held up well but continue to grow – the renovations side of the home building industry is definitely the shining light at the moment,” Harvey said.

“This trend of growing renovations is likely to continue not only because Australians love to renovate but also as households increasingly prefer to direct excessive property transaction costs towards improving their existing homes rather than trading up,” said Andrew Harvey.

In the September 2011 quarter, seasonally adjusted new residential building work done fell by 15.5 per cent in South Australia, 6.3 per cent in Western Australia, 12.1 per cent in Tasmania and 8.6 per cent in the ACT. Seasonally adjusted new residential work done rose by 5.5 per cent in New South Wales, 3.3 per cent in Victoria and 0.2 per cent in Queensland.