What’s behind the demand for renovation work?

Thursday, 28 August 2025

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Home renovation work is a bright spot for tradies as the construction industry navigates the downturn, but there will not be a repeat of the 2021 boom any time soon.

And many industry insiders say they have not seen a significant increase in demand for renovation work recently - other than the traditional seasonal lift as winter nears an end.

A new Combined Building Supplies Co-Operative survey of its 1800 plus members showed renovation was the dominant type of work at 53%. In contrast, new builds accounted for 29% of work and maintenance/subcontracting jobs for 26%.

The organisation’s chief executive, Carl Taylor, said renovation work was holding up strongly for tradies right now, with new build and commercial work under more pressure.

Renovation work was less dependent on land availability and council consent delays and homeowners could tackle them in stages, he said.

“People may be putting new build work off and focusing on improving their existing property instead, but our survey also shows that client hesitation is the number one concern for tradies (at 39%).

“That affects not just builders, but suppliers, subbies, and the whole supply chain, and it makes chasing less costly reno projects a good option for tradies,” he said.

“Our merchant spend figures support that take on what is happening as they show smaller spends, indicating renovation work, rather than more extensive builds.”

Taylor said it was easier for smaller tradie businesses to be busy than larger ones.

Once there were three to four people on the books there needed to be a fair bit of work in the pipeline to see them through, and that made things harder, he said.

“If I was to go back on the tools as a solo worker, I could find work for myself alone quite easily and I would chase reno work to do that.

“One of my former builders is doing a lot of Builderscrack work, and he says it’s lots of smaller jobs, such as wall and door repairs or replacements. Any work is good but these are not big jobs.”

The survey also showed that 52% of respondents had steady work, but for 37% work was slowing and 9% had no work.

Just 16% of respondents reported a strong work pipeline, while 52% had a mix of confirmed jobs and gaps, and 22% were struggling to fill their books.

Taylor said the recent mantra had been “survive in 2025”, and was likely to be similar in 2026.

“We won’t see a boom like the one we have come out of for a long time. Lower interest rates will help, but it will be a while before that’s reflected in a surge of new builds.”

The drivers behind renovation demand

A possible driver behind the solid demand for renovation work could be home buyer preference for completed turnkey properties.

Ray White NZ chief executive Daniel Coulson said trepidation around interest rates and construction costs had led to a buyer swing towards finished homes.

But the strong demand for high quality, finished homes meant there were now less of them available on the market and the prices for them had lifted, he said.

“That may be forcing people to look at projects that need renovation work, and as construction costs have stabilised and the cost of borrowing has come back there may be more confidence around doing that.”

His organisation’s analysis of consent activity showed the value of consents for renovation work was well down from the height of the market in 2021, although it was still above pre-Covid days, he said.

“There is a greater inclination to undertake renovation work when the weather is better, and gradually increasing confidence in the property market.

“That may be leaving people more confident about doing a renovation, and that it will add value if they want to sell.”

Another renovation driver could be investors returning to the market. Cotality’s latest buyer classification data showed investors’ share of the market has increased to 25% of sales, up from a low of 21% in the middle of last year.

Property Investors Federation spokesperson Matt Ball said more members were talking about good bargains being out there and finding properties they could add value to.

That would indicate there were investors buying properties that needed work done to them to add value, he said.

“It’s logical in this market, where investors can forget about 30% value increases, or property values doubling every 10 years. But they can still get value out of a property purchase by improving it.”

The question was whether or not they were getting tradies to do the work as many investors did a lot of the work themselves, although they would use tradies for larger projects, he said.

“This is speculation, but the Cotality data shows owner-occupiers aren’t buying and selling at the same rate as they used to, so maybe they are doing lots of reno work instead?”

Seasonal sentiment change

But Certified Builders chief executive Malcolm Fleming did not believe there had been a noticeable increase in renovation work.

It was a legal requirement for a builder to enter into a contract with a homeowner for work valued over $30,000, and his organisation’s 3000-plus members would download the Certified Builder contract for that, he said.

“There has been no uplift in the numbers doing that since January this year. I’d like to say they have picked up and are going gangbusters, but they’re not - the numbers have been static this year.

“There could be people doing a fair bit of work below that $30,000 mark, but we wouldn’t see that.”

With the longer hours that spring brings on the way, and some more positivity from the latest OCR cut, people might start to feel better about commissioning more building, and renovation work, he said.

“But at this point while some tradies are experiencing good forward workloads and doing well, others are really concerned about their pipelines and what is coming up.”

Fleming said the sentiment coming through from builders was that it was tough out there now, but they were positive about the long-term future of the industry.

Renovation expert Jen Jones, from Nine Yards Consulting, took a similar view. She said there had not been a big increase in renovation projects, and a lot of builders were still laying off staff, or looking for work.

“But this is a normal time of year for renovation projects to uplift as people get ready for summer, and want to do things like update the bathroom, or add on a bedroom so their house is ready to host guests.”

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