In the first of Commonwealth Bank’s Future Home Insights Series, Michael Workman, senior economist, said over the longer term, a number of economic, cultural and demographic trends are emerging that may significantly influence the Australian housing market.
“Commonwealth Bank has identified the major trends shaping Australia’s housing market by 2030 to assist home buyers understand how the property market is evolving over time,” he said.
One of these trends, according to the series, is that home renovation spending is predicted to top $32 billion in 2016 alone, or around 36% of total spending on residential investment.
CommBank general manager of broker sales, Sam Boer, said the growing popularity of renovations could see investors presented with new opportunities as the increase the equity in their properties, but he recommends people seek guidance to help them make the most of any opportunity.
“Mortgage brokers or lenders can help customers access the additional equity in their home to renovate, subdivide or invest,” Boer told Your Investment Property’s sister publication, Australian Broker.
“There are a number of ways a customer can access equity in their home loan, such as topping up their existing variable rate loan or applying for a line of credit which they can access and use for renovations when they like.”
According to the insight report, apartments will also continue to become a more popular choice of dwelling.
CommBank’s report claims the average floor area of new dwellings has contracted by 0.7% between 2004 and 2013, while half of new dwelling investment is currently directed at apartments, well above the long term average of 30%.
CommBank claims living expenses such as energy costs are helping drive the popularity of apartments, as well as a rise in the number of one person households.
According to CommBank, one person households are the fastest growing group as of 2016, as many Australians marry later, live longer, and divorce is more common.