The residential construction industry : problems in shifting from new construction to renovation activities

Abstract

This thesis studies the response of the residential construction industry to the growing market for residential renovation, and its ability and willingness to transfer operations into renovation activities. The industry includes firms specializing in land development, new house-building, speculative and contract renovation projects. The thesis is concerned with the inherent industry constraints in meeting housing demand. The increasing importance of residential renovation relative to new housing construction is examined. A review of the new residential and renovation sectors follows, comparing and contrasting the nature and characteristics of both sectors. It is found that small and medium-sized firms within the new residential construction sector are most able to enter into residential renovation activities. The thesis reveals that the industry has so far shown a small scale response to the potential market for residential renovation, and has been inhibited by a number of barriers to entry. These include rigidities in the institutional approach to the residential renovation construction process. Other barriers arise from the inherent differences between renovation and new construction activities. Proposals are made to facilitate a more effective and efficient renovation construction process. These should induce the industry to be more able and willing to adjust to the increased pace and scale of residential renovation activity expected in the future. In turn, the maintenance and rejuvenation of the existing housing stock will be facilitated in accordance with future housing demand.