MELBOURNE home owners have spent more on renovations than residents elsewhere in the country for the second year in a row, with Victorians shelling out $1.66 billion last year on property improvements.
The city's builders are reporting that the level of inquiry for home renovations has experienced a strong upswing in the past few months, as people become more confident about the economy.
Figures released by the Australian Bureau of Statistics this month also show NSW residents spent $1.62bn on home improvements, while $1.18bn was spent in Queensland and $630m in Western Australia.
Senior manager of building and construction at BIS Shrapnel, Jason Anderson, said Sydneysiders traditionally spent more on their homes. "The gap has been closing for the last five years and, in that time, Melbourne has been catching up and (has) overtaken it," he said.
Melbourne home prices roared ahead by a higher rate than in any other national housing market last year, with the city's median house price increasing by up to 18.5 per cent during 2009, according to figures from Australian Property Monitors.
Mr Anderson said the renovations market was doing well because of the strong housing market. First-home buyers who had bought older properties six months ago were now moving to renovate them, he said.
Investors living within 10km of the city were also improving properties before selling them while the market was still strong.
Melbourne builders contacted by The Australian said there was strong activity at the higher end of the renovation market.
The director of PXJ Constructions, Matt Jones, said he was getting "plenty of phone calls" but could not do all of the work.
"The work I do is fancy stuff around Camberwell (in Melbourne's inner east)," he said.
Most owners were in white-collar employment, and kept the old part of terrace houses intact and demolished extensions erected in the 1970s-era, adding a larger living area and an ensuite. Such work could cost between $300,000 and $600,000.
He said six months ago his phone would ring twice a month for new jobs, but now it would ring twice a week. "I think there is more confidence in the market," he said.'
Harley Dale from the Housing Industry Association said the renovation market started to improve throughout the country during the second half of last year and this financial year should show a recovery.
Meanwhile, a report released this month by Macromonitor suggests construction cost growth is expected to increase by about 4.5 per cent this year, 5 per cent next year and 6 per cent in 2012.
The report's author, Macromonitor director Nigel Hatcher, said the inflation was being driven by the solid recovery of the Australian economy, a strong rebound in recovery prices and the increasingly good performance of the construction sector.
Jenny
Source
City of Melbourne leads rest on home improvement
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