SYDNEY’S home owners have shrugged off rising interest rates and started renovating again, with the value of renovations and additions increasing for the first time in 18 months.
But the jump in renovations came amid a slump in overall building late last year, sparking speculation that interest rate rises were starting to bite into economic activity.
The jump in renovations – a 7.9 per cent increase in the three months to December, according to Bureau of Statistics figures released yesterday – breaks a fall in NSW renovations since mid-2006.
Home-buyers tended to renovate soon after they purchased a property, which means most of the work would have been done in buoyant inner-city property markets. But the national chief executive officer of Masters Builders Australia, Wilhelm Harnisch, said the high cost of property in inner-Sydney would prompt more people to start renovations, which would be cheaper than moving house and paying stamp duty.
This means that it is likely that alterations and additions will be a growing feature of the Sydney housing market.