Australia’s kitchen and bathroom industry is back on the rise, a new report shows.

And the industry’s outlook over coming years is promising.

Housing Industry Association has released the 2025/26 edition of its HIA Kitchens and Bathrooms report.

The report provides an overview of current market conditions and the forward outlook for work which is associated with both the installation of kitchens and bathrooms in new dwellings and the renovation of existing kitchens/bathrooms in established homes.

It draws upon the results of a national survey of HIA members as well as data from various sources.

According to the report, activity in the kitchen and bathroom industry has recovered strongly and is likely to expand further over coming years.

In terms of new dwelling construction, the report indicates that:

• The number of kitchens which have been installed in new homes is forecast to have increased by 12.9 percent in the current financial year to come in at healthy levels of 202,500. Going forward, this number is expected to rise to 222,700 by 2028/29.
• The number of bathrooms which have been installed in new homes is forecast to have surged by 23.8 percent in the current financial year to reach historically elevated levels of 438,700. By 2028/29, this number is expected to reach 460,000.

In terms of existing home renovations, HIA does not provide specific activity forecasts in respect of kitchen and bathroom work in particular.

However, it forecasts that the overall dollar value of home renovation work done is likely to rise from already elevated levels to reach a new record by 2030 (see charts below).

It also projects that the ‘notional demand’ for existing kitchen and bathroom renovations is likely to increase strongly over coming years (see charts below).

This estimate is based on the number of existing dwellings which are reaching the 15-to-20-year age bracket during which significant kitchen and bathroom renovation work commonly takes place.

Given these two observations, it is likely that kitchen and bathroom renovation activity levels are healthy and expected to expand further over coming years.

Five reasons for optimism

At a launch event for the report in Melbourne on June 12, HIA Senior Economist Maurice Tapang outlined five factors which are supporting the current recovery and outlook.

First, the rising number of kitchen/bathroom installations in new dwellings is a direct result of the recovery in new home construction.

The particularly strong surge in bathroom installations also reflects the focus of the recovery to date in the detached house segment of the market. (According to the survey, each new detached house has an average of 2.43 bathrooms installed.)

With overall dwelling commencement numbers expected to continue to grow, HIA expects the number of kitchen installations in new dwellings to continue to rise accordingly.

Bathroom installation numbers are also expected to rise. However, the rate of growth in this sector is expected to taper off as the focus of the housing recovery shifts toward multi-unit dwelling typologies (units, townhouses and apartments).

(image: AI generated via magnific)

Next, there is the broader economic outlook.

At first glance, this appears to be gloomy as consumer confidence readings have plummeted in response to higher interest rates, the Iran War and uncertainty over budget measures.

Despite this, Tapang says that concerns about a potential recession this year are overblown.

This is the case as consumer spending is being supported by low unemployment and high levels of household savings, government expenditure is continuing to rise and the boom in artificial intelligence is driving a recovery in business investment off a low base.

Indeed, leading property indicators are encouraging.

The number of web searches for new homes – a likely indicator of new home building contract signings nine months in advance – is up by around 40 percent over the past year.

Third, there are shifting consumer behaviours and expectations.

Over the past decade, the number of Australians who work from home increased by around 50 percent to go from 3.467 million in 2015 to 5.224 million in 2025, according to ABS data.

Over the eighteen-year period between 2006 and 2024, meanwhile, ABS data indicates the average time which is spent on food preparation each day increased from 47 minutes to 72 minutes on weekdays and from 49 minutes to 85 minutes on weekends.

Over that same period, the average time spent each day on personal hygiene increased from 48 minutes to 56 minutes on weekdays and from 50.5 minutes to 58 minutes on weekends.

This means that people are spending more time not just in their homes but in their kitchens and bathrooms.

As this occurs, expectations about what these spaces need to deliver are on the rise.

(With people spending more time in their homes and more time on tasks such as cooking and personal hygiene, expectations of kitchens and bathrooms are increasing)

Fourth, Australia has a growing number of established homes which are reaching the 15-to- 20-year age range.

This is important as survey respondents indicated that 36 percent of their kitchen renovation jobs and 40 percent of their bathroom renovation jobs are performed on homes which fall within this age bracket – the highest portion of any age bracket.

Finally, encouraging signs in the broader home renovation market bode well kitchen and bathroom renovations activity.

In the March quarter, these include an upturn in: the number and value of loans which are approved for existing home renovations; the number of council renovation approvals; overall renovation investment and retail turnover of household goods.

As mentioned above, HIA forecasts that the value of investment in home renovations will increase from already elevated levels to reach a new record by the end of the decade.

In part, Tapang says demand for home renovation work is being driven by high dwelling prices.

These are adding to the cost of buying a new home (stamp duty, agents fees etc.) and encouraging many households to instead consider renovation options.

(with expectations for strong home rennovations activity generally and a large ‘notional demand’ for kitchen and bathroom renovations driven by a large number of existing homes which are reaching the 15-to-20-year age bracket, the outlook for kitchen and bathroom renovation activity across Australia is strong)

Industry challenges

Whilst overall conditions are positive, the report highlighted challenges across several areas.

First there is labour availability and costs.

Among survey participants, 29 percent and 27 percent nominate labour availability and client price sensitivity as the most significant challenges in their business over the past twelve months.

In terms of the former issue, challenges have been exacerbated by an ongoing shortage of skilled residential tradespeople.

This is one of several factors which are driving up costs. In fact, respondents indicated that labour is the largest component of cost for kitchen work and the fourth largest component for bathroom work.

Combined with client price sensitivity, these cost pressures are affecting profit margins.

Almost one third (31 percent) of all respondents have needed to absorb additional cost increases over the past twelve months.

Another observation relating to cost is that clients are pulling back on expensive items such as cabinets and benchtops.

In benchtops, for example, Tapang says that clients are increasingly choosing options such as laminate as opposed to more expensive options such as natural stone.

In terms of the actual design and construction, one third (31 percent) of all survey respondents nominated new accessible design requirements as their most significant challenge.

These were introduced under the 2022 update of the National Construction Code (NCC). They are now in place across five jurisdictions (NSW, WA and the ACT have elected not to adopt these requirements).

In terms of kitchen and bathroom design, new required features include at least one toilet on the ground floor, step free (hobless) shower recesses and reinforced walls around showers, baths and toilet to support future grab rail installation.

(with expectations for strong home rennovations activity generally and a large ‘notional demand’ for kitchen and bathroom renovations driven by a large number of existing homes which are reaching the 15-to-20-year age bracket, the outlook for kitchen and bathroom renovation activity across Australia is strong)

Finally, a concerning finding involves a lack of awareness about new requirements for lead-free tapware and other plumbing products which are expected to come into contact with drinking water.

Under the 2022 update of the NCC, any copper alloy plumbing product which is intended for use in contact with drinking water will need to carry the lead-free WaterMark certification in order to be legally authorised for installation.

Such products will need to limit their weighted average lead content to not more than 0.25 percent.

As well as taps, this includes fittings, valves, mixers, water heaters, water dispensers and water meters.

The new requirement will apply from 1 July 2028.

Meanwhile, manufacturers have only been permitted to produce and certify lead-free compliant products from 1 May this year.

Despite the importance of these requirements to occupant health, the survey indicates that awareness of these new rules remains low.

Among survey respondents, almost half (47 percent) were unaware that these changes are taking place.

Meanwhile, only 38 percent have been informed about this change by suppliers.

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