By Emily Bencic

High house prices in Sydney and Melbourne are driving the renovation industry which is set to increase by about up to $700 million a year in the next two years, according to the Housing Industry Association.

House prices are encouraging homeowners to renovate their current homes instead of purchasing a new home.

“With annual home renovations expenditure topping $31 billion, the sector packs quite a punch across the Australian economy,” HIA senior economist, Shane Garrett said.

“With new home building set to fall back over the coming years, there will be increased reliance on home renovations activity as a source of demand within the industry. The turnover of existing homes also generates additional renovations demand. This is important because many renovation jobs are initiated by the new buyers of ageing houses.”

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This story first appeared on Appliance Retailer.