Kitchen and bathroom renos on the decline, but property prices holding
Posted on Monday, January 16 2012 at 11:21 AM
Investors are more likely to have daggy kitchens and older bathrooms for the next 12 months with renovations on the decline, but property prices are still firm, says the Housing Industry Association’s Kitchen and Bathrooms: Past Growth and Future Prospects 2011/2012 report.
“According to the Armageddon club, prices should have fallen through the floor by now,” the report says.
“Irresponsible commentary explicitly or implicitly talking of imminent, savage declines in price first gathered momentum in the current cycle back in late 2003 and are still going. Households and businesses get spooked by such talk and the current rife practice of undervaluation of residential property directly reflects price crash fears, so the talk is expensive, not cheap. But it’s just talk and we maintain our view there will be no crash.”
However, kitchen and bathroom renovations are being put on hold. The total value of kitchen installations is forecast to fall by $172 million in 2011/2012, before increasing by $147 million to a value of $2.7 billion in 2012/2013.
The total number of bathroom installations in new homes is also forecast to decline by 10.4 per cent in the financial year 2011/2012, from 299,300 in 2010/2011 to 268,200 in 2011/2012. Interestingly, the report says the average value for a new kitchen costs $19,011, which is less than a kitchen renovation ($19,900). New bathrooms are also cheaper than renovated ones, with the difference in price being around $3000, from $12,120 to $15,000.
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