Homeowners face new risk after record splurge on renos

Homeowners are forging ahead with more ambitious renovations than ever before – amid skyrocketing building costs – and one of the key factors driving the boom is families creating room for their adult children struggling to pay Sydney’s huge rents.

Exclusive HIA and ABS figures revealed the value of new renovations in NSW hit a record high of $3.9 billion over the year to June, with alterations in Sydney totalling $2.7 billion.

It’s followed explosive rises in tradie prices, with labourer, arborist, landscaper, builder and demolition costs rising by an average of more than 20 per cent over the past year.

Renovators in one Sydney postcode alone splurged $27m on projects in June, with spending on alterations and extensions doubling annually in many other areas, the HIA-ABS figures showed.

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BEFORE: a house in Avalon, one of the most popular suburbs to renovate, pictured in 2020, before it was renovated.

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AFTER: The Avalon home after the reno.

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Additional data from tradie hub Hipages revealed a 10.4 per cent annual increase in job requests from homeowners.

Hipages vice president of marketing Nick Ellery said demand was up for almost every trade.

“We’ve seen an increase in jobs on the platform across the board year on year – landscaping, cleaning, electrician, plumbing,” he said.

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Tradies told the Saturday Telegraph much of the works they were doing were house extensions to accommodate owners’ adult children, many of whom struggled to pay Sydney’s excessive rents.

Owners often used renovations they had seen on TikTok, YouTube or reality TV as a blueprint for what they wanted to do, tradies claimed.

“The Block is still a big one,” said plumber Alex Taskun, the director of two of Sydney’s biggest trades companies. “People see what’s on there and say they want the same, even if the show isn’t realistic.”

GT Plumbing director Alex Taskun said renovation work has quadrupled. Picture: Sam Ruttyn

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Mr Taskun added that his renovation work has quadrupled compared to previous years.

“We’re getting a lot of work from families who want their kids to stay holed up with them because the housing market is cooked,” Mr Taskun said.

“If you have two (adult) kids each going to pay $1000 a week in rent, across two years, that’s more than $200,000. Put that into an extension instead and the benefits make sense.”

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Oliver Pennington, co-founder of tradie group ServiceSeeking, said tradies were so overwhelmed with work that simply getting them to supply quotes could be a challenge.

“I don’t think we’ve ever seen such a big increase in costs across so many (trades), just because the supply of skilled professionals doesn’t match the demand,” he said.

“Renovation shows on TV certainly do inspire people to get stuff done, but they also can set unrealistic expectations on how fast and easy it can be.”

Simon Marsh, Danielle Pile and kids Eleanor and Frey, at their renovated unit soon to hit the market in Manly. Picture: Monique Harmer

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The ABS figures showed the last time there was anything close to the current level of renovation spending was immediately after the Covid lockdowns of 2021.

This was when interest rates were at record lows, household savings were high, and large-scale renovators were getting a budget boost from the now defunct government HomeBuilder scheme.

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It was also a time when many people felt encouraged to renovate after spending more time at home.

Renovation spending has now surpassed those post-pandemic levels in many parts of Sydney – particularly pricey coastal suburbs where homeowners were sitting on huge troves of equity to fund projects.

The value of renovations in suburbs Manly and Fairlight was the highest in NSW at $88m over the year to June, followed by $78m in Avalon Beach and Palm Beach.

BEFORE: A Fairlight home before it was renovated. It had sold prior to the renovation for $2,155,000 in 2017.

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AFTER: 9 Daintrey Street, Fairlight, NSW was renovated and recently sold for $3,475,000.

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Double Bay renovators spent a total $69m over the year, with $27m spent in June alone.

Some tradies said the true number of renovations was likely under-represented by official figures since they only tracked council lodgements.

It follows reports of a recent uptick in DIY work from renovators wanting to save money, with hipages noting an increase in requests to fix botched jobs.

Experts said some of the other forces driving up renovations in the current climate were a lack suitable housing for upsizers to move to and construction delays diminishing the appeal of new builds.

Housing Industry Association (HIA) senior economist Tom Devitt said renovation numbers were likely to rise in most states due to many of the homes built in the early 2000s now requiring major updates.

The Marsh family is also hoping to build a new home.

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Simon Marsh is renovating his Manly unit in preparation for a sale, adding new touches to a previous renovation he did a few years ago, and said the challenge of renovating was worth the reward.

“The great thing with a renovation is you can get it to just how you like it. We have something much better than we could have bought, but I wouldn’t say it’s been easy,” he said.

His selling agent Eddy Piddington of Ray White Northern Beaches warned homeowners to be selective with the renovations they took on.

“The best bang for your buck jobs are painting and floors and, if you’re selling, styling,” he said. “If you do anything bigger, prepare to stay in the property longer as it’s harder to get that back.”

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