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New National Australia Bank (NAB) data found that renovation loan demand increased 16 per cent year on year to 30 April, with growth recorded across all major states.
Queensland led the increase, with renovation lending up 25 per cent, followed by Western Australia (17.9 per cent), South Australia (15 per cent), Victoria (10.8 per cent), and NSW (10.7 per cent).
The figures come as NAB economists warn that higher fuel prices linked to global tensions could begin flowing through to construction costs, particularly for materials and transport.
NAB executive home lending, Denton Pugh, said renovation activity remained resilient, although households should be prepared for potential cost volatility.
“We’re still seeing demand for renovations, with lending up 15 per cent in the past month alone, but the risk is costs could begin creeping higher again as fuel prices flow through to building materials and labour,” Pugh said.
“We know many Australians are renovating to make their homes more liveable, whether that’s creating space for a growing family, enabling hybrid work, or improving energy efficiency.
“Renovations remain a great way to add value, but in the current environment it’s important to plan ahead, build in buffers and stay flexible as conditions change.
“Simple steps like locking in quotes early and carefully timing your build can make a real difference to the final cost.”
The construction industry is also reporting strong demand for renovation work.
Stephen Reddish, owner of Senmak Construction, said more home owners were choosing to renovate or extend their existing homes rather than relocate.
“Our pipeline is full, and inquiry levels remain high,” he said.
“While costs have stabilised compared to previous years, we’re starting to see some pressure emerge in areas like fuel, freight and deliveries, which is flowing through to materials such as steel, concrete and PVC.
“I’d encourage renovators to lock in fixed prices where possible and build in a provisional allowance, particularly for items that could move.
“It’s not all doom and gloom. With good planning, clear pricing and the right advice early, home owners can manage costs and avoid surprises.”
[Related: Connective launches 2% deposit home loan with Skip]
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