Whilst suffering from the current slump in home renovations, the kitchen and bathroom industry in Australia is deriving significant benefits from the recent upturn in new housing construction and will later be further strengthened by an upturn in renovation work toward the latter part of the decade, a new report has found.
Published by the Housing Industry Association (HIA) in conjunction with Sydney based GWA Bathrooms and Kitchens, the latest HIA Kitchens and Bathrooms report estimates that following a weak year in 2011/12 amid subdued demand for new housing, the total number of bathroom installations which took place throughout the nation rebounded 12.9 per cent to come in at 311,800 in 2012/13 as a recovery in new home construction got underway - the second highest level on record over the past 15 years.
Moreover, the HIA expects activity in new home bathroom installation to remain strong, with the number of such installations to grow by a further one per cent in the current financial year before going on to reach 331,400 by 2017/18.
Furthermore, the number of kitchen installations rebounded 11.7 per cent to come in at a respectable 162,000 in 2012/13 and is expected grow further by 2.8 per cent this year on its way to reaching 172,600 by 2017/18.
This lies in stark contrast with the renovations side of the market, for which precise estimates are not available due to data limitations but which has no doubt been affected by a recent drop in the overall level of investment in household renovations to 10-year lows.
Still, with the HIA expecting the broader renovations sector overall to lift in coming years as firmer dwelling price growth allows greater scope for home improvement lending, the number of kitchen and bathroom installations resulting from renovation work would be expected rebound strongly toward the middle to latter part of the decade.
Such expectations are further underpinned by ABS estimates that the number of houses around the country which are between 11 and 20 years old - the primary age during which significant indoor renovations typically occur - will bottom out at around 920,000 this year and rise to around 970,000 by the end of the decade.
As indoor renovation activity rises, however, so too will demand for skilled tradespeople, a phenomenon welcomed by tradespeople themselves but which raises fears of a skills shortage and upward pressure on trade prices in coming years.
In its report, the HIA noted that while supply in trades such as plumbing, joinery and ceramic tiling remained adequate, it was tightening in all main areas exposed to kitchen and bathroom work except for electrical, which is heavily exposed to the mining downturn.
In other developments noted in the report, with regard to HIA members involved in kitchen work:
- More than eight in 10 (82 per cent) surveyed say they were engaged by home owners directly as opposed to through a principal building contractor (14 per cent) or an employer (three per cent).
- More than nine in 10 (91 per cent) expect the same or more levels of work in 2013/14 as opposed to 2012/13.
- More than half of kitchens installed in new homes (52 per cent) took less than four days to complete.
- Almost three quarters (74 per cent) say it is more expensive to install a kitchen as a renovation as opposed to a new home.
- Almost three quarters of all kitchens which are upgraded or remodelled are between 11 and 20 years old.
- Half of all jobs involve full renovations as part of a broader renovation project, 40 per cent involve full renovations without other concurrent renovations and only a small portion involve functional improvements to existing kitchens or minor updates and repairs to existing kitchens.
- Seven in 10 say they prefer to use domestically produced goods during kitchen work, with a further 27 per cent saying the origin of goods is not important.
- Cabinetry (cupboards, doors, draws, shelving etc.) was the most likely item in kitchen jobs to involve imported components, with 88 per cent of components typically imported followed by bench tops (69 per cent), tapware (58 per cent) and lighting (56 per cent). Wall finishes were the most likely to be domestically produced (76 per cent) followed by sinks (39 per cent) and floor coverings (38 per cent).
Meanwhile, in terms of those surveyed who worked on bathrooms:
- Almost nine in 10 (88 per cent) are engaged by the homeowner directly.
- Almost nine in 10 expect more or the same levels of work in 2013/14 compared with 2012/13.
- 20 per cent of installations in new homes take between nine and 12 days, 17 per cent between five and eight days and 16 per cent between 13 and 15 days.
- Seven in 10 bathrooms upgraded were between 11 and 20 years old.
- 49 per cent of bathroom renovation jobs involve full bathroom replacements where no other renovations are occurring, 29 per cent involved full replacements as part of broader renovation jobs, nine per cent involve functional improvements to existing bathrooms and eight per cent involve adding a second bathroom/ensuite.
- In contrast to kitchens, where almost six in 10 jobs involved enlarging kitchen space, more than three quarters (76 per cent) of bathroom jobs involved working within the existing space.
- The average dollar value of bathrooms installed in new homes is $13,986.
- Almost three quarters surveyed say it costs more to install a bathroom as part of a renovation as opposed to a new home, with 49 per cent saying the price tag for installed bathrooms in renovations is 10 per cent or more higher compared with new home counterparts.
- Floor tiling and floor coverings are the most likely components to be imported (66 per cent) followed by wall tiling/wall coverings (65 per cent), fixtures and fittings such as towel rails or soap holders (57 per cent) and tap ware (56 per cent). Shower screens (85 per cent), vanity units (64 per cent) and baths (44 per cent) were the most likely to be locally made.