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Bathroom sizes shrink as home renovators scale back amid affordability concerns


The size of a typical bathroom has decreased as home renovators and builders scale back their renovation plans due to affordability concerns and higher mortgage repayments, according to the Housing Industry Association (HIA) Chief Economist Tim Reardon.

Speaking at the launch of the HIA Kitchen and Bathroom Report, which provides comprehensive forecasts and insights into this important sector of Australia’s residential construction industry, Mr Reardon said, “Shrinkflation is evident across the economy as households bear the cost of higher mortgage repayments, and home renovations are no exception.”

The report found that affordability and value have become more significant considerations for households looking to renovate or build a new kitchen or bathroom. This adjustment in consumer behavior is more evident in bathrooms than kitchens, with each new home built in 2023 having an average of two bathrooms, down from 2.6 per home in the previous year.

During the recent building and renovation boom, kitchens increased in size, with more appliances and premium fittings, as homeowners spent more time and money on their home renovations. However, the renovations market is now cooling from its record peak, although it remains strong due to low unemployment, house price growth, and limited quality housing stock available for purchase.

The cost of a new kitchen or bathroom rose during the pandemic as households sought larger living and work-from-home spaces, and this trend is continuing, albeit due to higher construction costs. Renovation jobs have also been constrained, with a large majority of bathroom jobs involving the same or even smaller footprint, in contrast to the previous year when more than half of these jobs involved expanding bathroom spaces. On the other hand, the majority of kitchen renovations in 2023 resulted in an increase in the kitchen footprint.

Mr Reardon expects the cost of construction to stabilize this year as global supply chains are restored and labor shortages ease. He also notes that there is strong pent-up demand for housing amid record-high population growth and a strong renovations segment, which bodes well for a solid volume of home renovations activity in the years ahead, although below the level observed in recent years.

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