The number of Australians who are investing in renovation works continue to increase, according to data from the Australian Bureau of Statistics.
Over the three months to February, lending for renovations have risen to its highest level since 2009. The value of loans for home alterations and additions over the period grew by 47.6% on an annual basis.
"Households have changed their spending habits in response to the COVID-19 interruptions. Many have diverted funds that would have typically been spent on travel and entertainment into buying a new home or improving their existing one," said Tim Reardon, chief economist at the Housing Industry Association (HIA).
The growth in loans for renovations came with the overall increase in the number of loans for the construction of new dwellings. February marked the sixth consecutive month of record highs for construction loans, which hit a 43% quarterly growth.
Western Australia reported the biggest gain at 255.1%, followed by the Northern Territory (200%), Queensland (191.3%), and Tasmania (176.1%). The remaining states reported increases between 86% and 131%.
"Demand for new housing has been surging since mid-2020 due to a combination of the HomeBuilder program, record low interest rates and the shift in populations away from apartments and capital cities towards detached housing and regional areas," Reardon said.
First-home buyers have been an active driver of demand for construction loans. In fact, they accounted for over 40% of loans over the past seven months.
"First home buyers are riding the HomeBuilder wave. This is the strongest share for first home buyers since the stimulus associated with the GFC," Reardon said.