Trends:Improve rather than move is the new trend, with a rise in the number of people seeking to extend and renovate their homes while there are fewer new homes being built.
The latest figures from the Central Statistics Office (CSO) reveal that planning permission applications for new houses fell by nine per cent in the first quarter of this year while the number of applications for extensions were up by 13 per cent.
Meanwhile, sales of hardware, paint and glass were up by 15 per cent up this May, according to the CSO's retail sales index. This sector is one of fastest growing retail categories, according to John McCarthy, head of research with Lisney.
Grafton Group, for example, which controls Woodies and Heiton Buckley, reported last month that turnover in the first half of 2007 was up by 12.5 per cent. The DIY business was "performing strongly", according to the group.
This growth in the home improvement sector is fuelled in part by SSIA windfalls, says McCarthy. Another big driver is the failure of stamp duty reform to facilitate people who want to trade up, he says.
"Many people were sitting on their hands to see if there would be root-and-branch reform of stamp duty, making it cheaper to trade up.
"However, the reforms were restricted to first-time buyers only and now existing owners are deciding to extend rather than move."
The increased availability of builders is also a factor, he says. The slowdown in the new house sector, which will almost certainly happen over the next six to 12 months, will free up workers, says McCarthy.
Thirteen years of successive house price growth has resulted in a labour shortage for smaller construction projects, he says.
"Over the last 10 years it was difficult to get someone for an extension, attic conversion or even to tile a bathroom because they were all engaged in big construction projects."
Now, with new home completions expected to fall back from 88,000 last year to somewhere between 70,000-80,000, there will be a much greater availability of builders, he says.
