2023 may be a better year for renovating in Sydney than many would have predicted.
That’s the view of the Housing Industry Association (HIA), the peak body for residential building in Australia, a view shared by Addbuild proprietor Chris Books with strong reasoning.
HIA chief economist Tim Reardon noted in a recent Sydney Morning Herald interview that “the rises in the cash rate are taking demand out of the new housing market but, in contrast, we don’t expect renovations to slow at all.”
Drivers the Same, Conditions Easing
His view is built on a number of factors including a more predictable supply of materials and the fact that many homeowners still have savings accumulated during COVID.
Chris Books looks at the issue from a more down-to-earth point of view: “The homeowners talking to us now are really no different to previous years,” Chris explains. “That’s because some problems have to be dealt with now, like having a growing family and a home that’s too small. They aren’t going away by magic.”
“Two thirds of the proposals we wrote in January were for families with kids who needed more space,” Chris continues, “the only thing that changed – and we’ve seen this before when interest rates go up – is that people lean more towards ‘needs’ than ‘wants’.”
“In good times, people may use opportunities like a renovation to add features to their home that they would love to have. Right now they tend to strip their requirements back more to the things they immediately need – and for those growing families it’s space: extra bedrooms, bathrooms and study areas.”
Labour and Material Shortages
What about other problems like the supply of building materials and labour shortages?
Tim Reardon thinks the availability of some materials will recover in 2023 and any shortages might simply mean a compromise on your first choice of products like tap-ware and tiles.
Chris is also positive on that front. “Most of the bottlenecks are being worked through.” Chris agrees. “I’d also add that in the past two years of shortages, companies like Addbuild had the advantage of long standing relationships with suppliers and this continues to give us priority and more certainty.”
“We’ve had the same hardware supplier for all of the 43 years we’ve been in business,” Chris emphasises, “and it’s been 30 years with our timber supplier.”
In terms of Labour, it’s a similar story. Chris feels that builders with long-standing relationships with tradespeople have fared better than those who don’t.
“We’ve worked with the same roofer since 2000, in fact most of our plumbers and electricians for more than two decades. We recently lost one plumber who had been with us since day dot, but that’s because he retired!”
Importance of Experience
For Chris Books, his confidence about 2023 is also based on how Addbuild has coped with adverse conditions in the past.
“It’s been a tough two years with bad weather and other factors beyond our control, but Addbuild has been in business for 43 years,” Chris notes, “so we’ve been through tough times before and learnt how to cope by looking after what we can control.”
“Our foundation year, 1980, was the beginning of a decade of instability: record interest rates, the removal of negative gearing in 1985, then they reinstated it. We also had to deal with the effects of the 1987 stock market crash.”
“We’re not the only Sydney builder who has used our experience to keep thriving. We understand what jobs to take on and which ones to avoid, how to maintain the necessary cash flow to operate without interruption, and when to buy materials to anticipate restricted access.”
“So for us, 2023 looks much better than 2022, and with La Nina relenting, our roofers are looking forward to less interrupted conditions as well!”
Looking to Renovate?
If you are looking to renovate and want further advice, Addbuild is Sydney’s leading builder of home additions and extensions with more than 2,000 projects completed since 1980.
Feel free to delve into our comprehensive suite of articles with advice about all aspects of renovating.
If you are ready to renovate now, call our office on (02) 8765 1555 or send us a message using our contact form if outside of office hours.
Addbuild offers a ‘concept-to-completion‘ service that includes experienced designers and the management of the Development Application process on your behalf.
