New Home Construction in Australia Hits 40-Year Low as Renovation Spending Surges
A KPMG report reveals a shift in residential construction priorities, with 40% of spending now directed toward renovations rather than expanding housing stock.
- New private home construction spending per capita has dropped to its lowest level since 1987-88, highlighting a significant decline in housing expansion efforts.
- Renovation spending has grown to 40% of total residential construction expenditure in 2023-24, up from 34.2% five years ago, as homeowners prioritize upgrading existing properties.
- Nearly 10% of new construction spending is allocated to one-for-one home replacements, with Victoria leading at 12.6%, followed by Western Australia and New South Wales.
- Restrictive planning regulations, high property values, and lower risks for builders are driving the preference for renovations over building new housing stock, particularly in affluent and coastal areas.
- Experts warn that the shift in resources toward renovations and rebuilds is exacerbating Australia's housing shortage, calling for policy changes to encourage higher-density housing development.
9News 
The Sydney Morning Herald 
The Guardian 