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About Kooky and Shaka →Spending on new homes in Australia has risen 20% over the last four years, while spending on knock-down rebuilds has fallen 32% over the same period, according to an analysis that the consultancy KPMG Australia published in a media release on Monday 5 October 2026. The firm's urban economist, Terry Rawnsley, also puts renovation spending at A$56.2 billion in 2025-26, almost 5% more than a year earlier and close to the peak it reached in 2021-22.
These are a private firm's calculations, not official statistics. KPMG says it worked from the June quarter national accounts of the Australian Bureau of Statistics (ABS), and the conclusions drawn from them are its own. This article follows what the release says nationally and for New South Wales, Victoria and Western Australia, three of the states it breaks out. The release gives no figures for South Australia, Tasmania, the Australian Capital Territory or the Northern Territory.
KPMG Australia media release, 5 October 2026, from the firm's analysis of the ABS June quarter national accounts. National figures.
Three kinds of housing spending
The analysis sorts the money spent on housing into three groups. The first is new dwellings: homes that add to the number that exist. The second is what the release calls one-for-one replacements, the knock-down rebuild, in which an existing house is demolished and a single new one takes its place. The third is alterations and additions, the label the ABS data uses and which KPMG treats as renovation spending.
The distinction matters for anyone who watches supply. A knock-down rebuild and a renovation both show up as building work, and both keep trades busy, but neither leaves a street with more homes than it had before. Only the first group does. The release sets no formal definitions beyond those descriptions, so the three terms are used here as KPMG uses them.
Related readIs a Dubai off-plan launch authorised? What a broker can verifyThe national finding is a movement between the first two groups: 20% more spent on new dwellings across four years, and 32% less on one-for-one replacements. The release gives those two results as percentages only. It does not publish a national dollar figure for new dwellings or for replacements, so the size of each in the national total cannot be read from it.
Why the firm says rebuilds are giving way
Mr Rawnsley attributes much of the change to planning. The release describes what he calls sensible reforms to the planning system, which have made it more practical to put more than one home on a site in an established suburb. Where an owner of a large block once chose between keeping the house and replacing it with another single house, a duplex is now more often possible.
"Now, the option to add more dwellings like duplexes to a site is much more viable," Mr Rawnsley said in the KPMG release.
He frames it as a matter of household arithmetic as much as policy. "People are rethinking their options and prioritising what makes economic sense," he said in the same release. The trade publication Elite Agent, which reported the analysis on 6 October 2026, quoted him as saying that densification is slowly starting to work.
The release names other pressures as well. It describes construction costs as soaring. It says lower interest rates in 2025 eased household budgets and that rising house prices may have encouraged owners to put money back into the homes they already have, before rates rose again in early 2026. Those are the firm's explanations for why renovation spending stayed high while replacement spending fell. The release presents them as interpretation; it does not measure the effect of each one.
Related readMelbourne's Preston Market plan: 900 apartments, eight towersThe renovation share, and one unclear figure
Renovations remain a large part of the whole. KPMG puts alterations and additions at 37% of all housing spending in 2025-26. The release says that share was 33% in 2019-20 and reached 40% in 2021-22, the peak.
One figure in the release needs care. It says the 2025-26 share is "down 2.6 per cent from the 2021-22 peak". The same release gives the two shares as 37% and 40%, which is a gap of three points on those rounded numbers. The wording does not say whether 2.6 is a change in percentage points, a proportional change, or a change in something other than the share. It is reported here as published, and no other figure in this article is built on it.
In dollars, the picture is of a recovery. Renovation spending rose almost 5% in the last year to A$56.2 billion, which the release describes as close to the 2021-22 peak. Elite Agent's report adds that, on Mr Rawnsley's reading, renovation activity is still well above its ten-year average.
How the rebuild share moved in the earlier edition
This is not KPMG's first look at the subject. On 27 November 2024 the firm published an earlier edition under the title "Renovation Domination", also by Mr Rawnsley, and its message ran the other way: new building was weak and renovations were taking a growing share. That release said inflation-adjusted spending on new private residential construction in 2023-24 was 14% below its level five years earlier, while inflation-adjusted renovation spending was 6.5% higher.
The 2024 edition also published, year by year, the share of new dwelling investment that went to one-for-one replacements nationally. It shows the pandemic-era rise and the retreat that followed.
Related readMinneapolis apartment permits fell to 300 units as rents hit a highKPMG Australia media release, 27 November 2024. The release labels the years 2018 to 2024 without stating the period each covers.
The two editions are not built the same way, so they are best read for direction, not joined into one series. The 2024 release worked with inflation-adjusted and per-capita spending and did not name its statistical source; the 2026 release cites the ABS national accounts. The earlier one put renovations at 34.2% of residential construction spending in 2018-19 and 40% in 2023-24, while the new one places the 40% peak in 2021-22. The direction is consistent across both: replacement spending swelled in the pandemic years and has been shrinking since.
New South Wales and Victoria
In New South Wales, the release says spending on new dwellings was again the largest housing investment in 2025-26, ahead of renovations. That reverses 2021-22, when, according to KPMG, renovation spending in the state exceeded new dwelling spending for the first time since 2012-13. The release also says one-for-one replacement spending in New South Wales almost doubled over the period, a statement that sits beside the national fall of 32% without being reconciled with it; the release gives no dollar figures and does not spell out the years compared.
Renovation money in the state is concentrated. The release says inner suburban heritage areas and popular coastal locations account for A$2.1 billion, or 48% of New South Wales renovation spending, and names the Northern Beaches, Sutherland Shire, Sydney and Inner West council areas. Wollongong is the only regional council area in the state's top ten.
Victoria is where the release is most complete. It puts the state's 2025-26 spending at A$24.4 billion on new dwellings, which it calls the highest since before the pandemic, A$13.0 billion on renovations and A$4.2 billion on one-for-one replacements. Renovations rose sharply there during the pandemic but, unlike in New South Wales, did not overtake new building, the release says. Areas close to Melbourne's central business district account for 51% of the state's renovation spending, with Boroondara and Stonnington named and Greater Geelong the only regional council area in the top ten. Across the leading renovation markets the average is A$218 million, about 18% of total residential building activity.
Related readBuying off the plan in New South Wales: what the law gives a buyerKPMG Australia media release, 5 October 2026. "Replacements" are one-for-one replacements (knock-down rebuilds). No equivalent dollar figures are given for New South Wales.
Set against each other, the Victorian figures show replacement spending equal to about 17% of the new dwellings figure. Mr Rawnsley links that to the shape of the city's blocks. "The historical subdivision pattern has yielded larger lots in Melbourne compared to Sydney," he said in the release, which adds that smaller Sydney lots may cost more to knock down and rebuild. The 2024 edition had already found Victoria with the highest replacement rate of any state, at 12.6% of new dwelling investment in 2024.
Western Australia builds new
Western Australia leans furthest towards new housing. KPMG puts its 2025-26 spending at A$8.2 billion on new dwellings, A$5.0 billion on renovations and A$556 million on one-for-one replacements, which makes replacement spending equal to about 7% of the new dwellings figure. Spending on new residential construction in the state rose 11.4% in 2025-26.
The state did not see the pandemic renovation surge recorded further east, the release says. One-for-one replacements rose modestly in 2022-23 and then returned to typical levels. Renovation spending is also less concentrated: the top ten council areas averaged A$58 million each, 9% of residential building activity, and together held 45% of the state's renovation spending. The release names none of them.
Mr Rawnsley said in the release that Perth simply has much more space in which to build new housing in desirable locations.
State totals and council-area figures use different measures
KPMG says its state and national spending comes from the ABS national accounts, while council-area renovation values are based on 2025-26 approvals for alterations and additions. That may be why two figures do not match: the release gives A$2.1 billion as 48% of New South Wales renovation spending, while Elite Agent reports a state renovation total of A$19.6 billion from the same analysis. The release does not explain the difference.
What official data showed in the same week
Two releases dated Wednesday 7 October 2026 give the wider setting. The ABS Building Activity publication for the June quarter 2026 reported dwelling commencements up 7.0% to 52,201, completions up 5.8% to 47,168 and a record 248,733 homes under construction. The NAB Housing Monitor published the same day put dwellings under construction at about 250,000, roughly 40% above the 2010 to 2019 average, and said detached house approvals were 18% higher over the year to August.
Those are counts of homes. KPMG's analysis is a count of dollars, drawn from a different ABS product, and the two cannot be converted into each other. What they share is a direction: more activity in building homes that add to the stock.
For agents, vendors and buyers, the practical reading is local. The release locates renovation spending in inner heritage suburbs and coastal areas, and attributes the fall in rebuilds to sites where planning rules now allow a second home. Whether a given block can take one depends on the planning controls of its own state and council, which the release does not set out. The release announces no date for a further edition of the analysis.
Kooky, from Shaka
Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
