2024 Is the Year to Renovate

For those considering a home renovation in 2024, the advice is crystal clear: act sooner rather than later. While eager renovators may still encounter challenges in securing skilled tradespeople, experts are recommending that they capitalize on the current stabilization in building costs before a potential surge in demand later in the year, possibly fueled by anticipated interest rate cuts.

Smith & Sons Renovations & Extensions Managing Director Leigh Wallis said that over the last year, the number of qualified trades who were good at what they do was getting very thin on the ground.
"Since the rebound from COVID, all of a sudden good tradies are finding themselves very busy again. The government is trying to help by bringing in labor from overseas, but a many of those aren't from construction, and when you are renovating someone's home, you need qualified people," he said.
"We've actually seen some tradies almost double their rates as a result of so much demand. And all of the tradesmen around are pretty busy."

This trend is supported by data from the Housing Industry Association (HIA), indicating a 4.4% rise in the average price of skilled trades in the past year.

HIA chief economist Tim Reardon acknowledged the difficulty in addressing the short-term shortage of tradespeople, emphasizing the strain on renovation projects. He warned that the situation might worsen in the latter part of 2024, especially if interest rates are cut and the economy experiences an upturn, leading to a surge in renovation activities.

Despite stable prices for home building materials and reduced shipping costs in the past quarter, the persistent demand for tradespeople remains a challenge. The HIA's latest data also revealed that the average price of a new approved house rose by 11.5% year-on-year in the September quarter.

Smith & Sons, operating in Australia since 2007, is currently overwhelmed with ongoing renovations and a backlog of projects into the new year. The settling of interest rates and building material costs has brought stability to the market, leading to a surge in inquiries and boosting various sectors of the economy.

Reardon of HIA noted that the continued growth in house prices, despite a slowdown, and the overall increase in people's wealth make them more inclined to renovate rather than relocate. The shift in people spending more time at home during and after the pandemic has contributed to a decade-long trend of high renovation activity.

Moreover, there is a notable push to educate renovators about potential cost savings through energy-efficient measures. The Green Building Council of Australia emphasizes that homeowners can save up to $550 annually on bills by adopting all-electric solutions, $463 on water costs with high-efficiency fixtures, and at least $800 annually on energy bills with solar panels.

"Green energy certainly is the way to go says Mr Wallis, 'and there's no better time to make that aspect of your home much more efficient than when renovating.''