GWA, a major bathroom supplier, says it will be subdued until at least next yearAustralia’s $11 billion renovations market is at the start of its first significant downturn in a decade amid a broader construction crunch and as interest rate increases and rising costs crimp spending on building., said it expected its renovations segment to remain subdued until at least the middle of next year.
“Our business is heavily skewed to a replacer [market]. Renovators tend to go a bit more upmarket. But they’ll now hunt for value, and we will get an opportunity to engage with them,” Mr Smart added. Sales at JB Hi-Fi stores outside The Good Guys rose 2.7 per cent in the quarter to June 30.
Michael Tsolakis, who runs Sydney construction group Beltam Projects, said families were looking for ways of reducing the costs to renovations. What might have started out as a plan for a $500,000 renovation is being whittled back to $350,000 by opting for a cheaper range of fixtures and fittings, and trying to do parts of the renovation themselves. “They’re looking at finding other ways of getting it done,” he said. “It’s usually the finishing touches.
GWA is also capitalising on higher demand for cheaper tapware and shower products. The company’s chief executive, Urs Meyerhans, said while those cheaper products had lower profit margins, it enabled GWA to generate sales in categories it had vacated about six years ago.GWA also said it had not hiked prices on July 1, as it often would, because of the softer sentiment and because it had already lifted prices in April. “Our decision was ‘let’s see how this plays out’,” Mr Meyerhans said.
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