Major renovations spending in Western Australia fell by 5.7 per cent in the September quarter to $59 million, according to the Housing Industry Association's Renovation Monitor.
It was the second quarter in a row that spending on major renovation activity, that is, jobs carried out by licensed builders and contractors, had fallen in Western Australia.
HIA WA spokeswoman Sheryl Chaffer said the level of spending was higher than in the September quarter last year and the major renovations market remained very healthy.
"What was spent this September quarter was 15 per cent higher than a year earlier so we are hardly looking at a weak update on the major renovations market," she said.
"Nevertheless, a shortage of skilled labour in the housing market amidst a still booming state economy makes growth in the major
renovations market a difficult thing to achieve."
"That having been said, as land supply constraints and booming land prices act as a drag on new construction over 2007 we would expect to see the major renovations segment of the residential sector outperform new housing."
In the three months to September major renovations expenditure also fell in Queensland, down by 4 per cent. Elsewhere, expenditure
on major renovations increased by 68 per cent in the Australian Capital Territory, 61 per cent in Tasmania, 17 per cent in South Australia, 3 per cent in Victoria, and 0.2 per cent in New South Wales.
Across the nation, spending on renovations made its third consecutive rise, up five per cent to $891 million, its highest level in two years.
"The retention of large capital gains from residential property together with continuing labour market strength is making major renovation projects an enticing proposition," HIA chief economist Harley Dale said.
"This is especially the case at a time when land supply constraints, higher interest rates and unjustifiably high government-imposed costs are conspiring to make new residential construction a less appealing option than it should be."
