Australians poured more than $53.8 billion into home renovations over the past financial year, with Brisbane emerging as the nation’s single biggest renovation hotspot.

Fresh data shows the Queensland capital alone accounted for more than $1.08 billion in approved renovations and extensions, a record figure for a single local government area and a clear signal of how households are responding to rising home prices and constrained housing supply.

The figures, drawn from planning approvals and national accounts analysis, reveal a renovation market rebounding for the first time since its 2021–22 peak, even as affordability concerns intensify across major cities.

Brisbane’s renovation boom in context

Brisbane City Council, Australia’s largest local government by population with more than 1.3 million residents, recorded a $128.5 million year-on-year increase in approved renovation and extension spending. That growth pushed total approved works past the $1 billion mark for the first time.

No other municipality came close.

New South Wales’ Northern Beaches, traditionally one of the country’s strongest renovation markets, slipped to second place with $386.5 million in planned works, down nearly $56 million on the previous year. The Gold Coast followed with just under $337 million, while affluent Victorian councils such as Stonnington and the Mornington Peninsula rounded out the top five.

Importantly, these figures only capture renovations large enough to require town planning approval. Smaller works like repainting, recarpeting and cosmetic upgrades sit outside the data, meaning the true scale of renovation activity is significantly higher.

A national renovation rebound

According to analysis from the Housing Industry Association, total renovation activity across Australia reached approximately $53.6 billion in 2024–25. That marks the first annual increase since the $56.7 billion high seen during the pandemic-era building boom.

By state, New South Wales led overall renovation spending with more than $19 billion, followed by Victoria at $12.5 billion and Queensland close behind at just over $12 billion. Western Australia and South Australia also recorded solid activity, reflecting a nationwide preference for upgrading existing homes rather than building new ones.

Equity, extensions and a compounding effect

HIA economist Maurice Tapang said the surge reflected a growing number of homeowners and investors drawing on increased equity after years of strong price growth.

“More cashed-up investors and homeowners with equity are drawing down on that equity to finance more investment,” Mr Tapang said. “It’s improving the values on top of the improvement in the value of their home.”

He described the trend as a “double-whammy”, where rising land values push up established home prices, renovations then add further value to those homes, and affordability pressures are compounded as a result.

This effect is particularly pronounced in tightly held, well-located areas where new land supply is limited and household sizes are increasing.

Renovating instead of relocating

The data suggests many households are choosing to renovate rather than move, especially in established suburbs close to jobs, schools and infrastructure.

In wealthier areas around Sydney, Melbourne and South East Queensland, extensions to add bedrooms or improve liveability are becoming more common as families adapt to higher occupancy levels and changing lifestyle needs.

While kitchens and bathrooms remain popular renovation projects, Mr Tapang said the rise in household sizes points to more structural work ahead, including second storeys, rear extensions and outdoor living upgrades such as decks.

Affordability risks for growing regions

The strongest growth in renovation spending was not limited to traditionally affluent areas. The Sunshine Coast recorded an $87.8 million year-on-year increase in approved renovations, while parts of western Sydney and regional South Australia also saw sharp rises from relatively low bases.

This raises concerns that renovation-led value growth could begin to erode affordability in areas that have historically provided more accessible entry points for first-home buyers.

“A lot of investors are opting for homes in the lower end of the market and then upgrading them down the line,” Mr Tapang said. “That strategy can quickly change the price dynamics of those areas.”

What it means for builders and suppliers

For builders, trades and suppliers, the data reinforces a clear shift in demand. As land becomes scarcer and more expensive, renovation and extension work is likely to remain a major source of activity, particularly in established urban markets.

At the same time, the figures highlight the broader challenge facing the housing system. Population growth continues to outpace the supply of new, affordable housing, pushing households toward renovation as the most viable option.

In that sense, the renovation boom is both an opportunity and a warning. It supports industry activity in the short term, but also underscores the structural issues that continue to shape Australia’s housing affordability debate.

The Good Builder view

Renovation is fast becoming the pressure valve of Australia’s housing market. When people cannot afford to move, they improve what they already have.

For the industry, this means capability in renovations, extensions and complex planning environments will be increasingly valuable. But without meaningful improvements in land supply and new housing delivery, renovation-driven value growth risks reinforcing the very affordability challenges that pushed homeowners down this path in the first place.

Author: The Good Builder

The Good Builder is a media platform that provides news and insights for Australia’s home building industry. From exclusive stories and curated insights to bold industry perspectives, we deliver the news and updates that keep builders, suppliers, and the entire home building industry inspired and ahead of the curve.