Residential Design Market Insights Q1 2025

Across the CO-architecture network and Australia, we’re seeing steady growth in homeowner engagement, with more homeowners connecting with verified architects, building designers, and interior designers through our Project Portal. The platform’s growth coincides with a broader national trend: a resilient, design-driven renovation market and ongoing investment in sustainable, energy-efficient homes.

Australia’s home improvement market remains robust, valued at over AUD 15 billion in 2025, with steady growth expected through 2033. Renovations now make up around 40% of total residential construction spend, reflecting strong household preference for upgrading existing homes rather than building new. This trend is driving greater demand for accessible, design-led expertise across the country.

Key takeaways (Platform, Q1 2025):

• 120+ projects posted in the last two months.
• 400+ projects received
• 50% renovations/additions/, 20% new builds, 20% interior design, 10% landscape/other.
• Median project budget: $800k–$850k.
• High Budget Range: $1–2 million
• Total project value on platform: ~$60 million.

1) Market Overview: How Homeowners Are Engaging Designers

Australia’s residential design and renovation sector continues to perform well through 2025, supported by household investment in property improvements and a shift toward quality, sustainable design.

• Renovation-led activity: With new build approvals still below target, many homeowners are investing in renovations, extensions, and retrofits to improve livability and value.
• Design sophistication: Homeowners are increasingly seeking professional input from architects and interior designers early in their project lifecycle driven by awareness of planning requirements, energy upgrades, and better design outcomes.
• Sustainability: Energy efficiency, electrification, and circular design are now mainstream considerations. Solar integration, all-electric upgrades, and passive design principles are core project drivers.
• Economic resilience: Despite higher interest rates and construction costs, household savings and long-term confidence in property values have sustained spending on major improvements.

2) Platform Overview

CO-architecture connects homeowners with Australia’s design professionals, simplifying the process of finding, briefing, and collaborating on residential projects. The platform fosters trust through verified profiles, transparent project briefs, and performance insights.

Mission: Empower homeowners to find the right professional for every project renovation, new build, or interiors.
Vision: Build the largest and most trusted design network in Australia.

3) Platform & Market Signals (Aug–Oct 2025)

Platform data reflects broader market behaviour. In Q1 2025, over 120 projects were posted and 400 distributed to professionals nationwide. Renovations and additions made up roughly half of all activity, confirming a clear market tilt toward re-use and improvement over new builds. Median budgets hovered around $800k, indicating continued strength in the mid-to-high end of the market despite interest rate pressure.

4) Geographic Distribution - Where Design Demand is Emerging

Insights:

• Victoria and New South Wales lead with over half of all project activity, reflecting concentrated homeowner engagement in urban markets.
• Western Australia and Queensland show strong growth momentum, driven by lifestyle and relocation trends.
• Tasmania’s 8% share highlights increased design demand in regional and lifestyle-driven markets.

5) Market insights

The latest ABS data shows Australia’s housing supply pipeline is under ongoing pressure. Total dwelling commencements fell 4.4% in the June 2025 quarter to 45,156 homes, driven by a 6.6% drop in new private house starts, while other residential (mainly apartments and townhouses) edged up 1.0%. Completions also softened, and the total value of building work done slipped 0.3% to $38.9 billion, even as renovation activity remained relatively steady.

Overall, the sector is cooling on new builds but still carrying a large pipeline-reinforcing the gap between Australia’s housing targets and what’s actually being delivered.

• Renovation resilience - Renovations now account for around 50% of total activity, as homeowners prioritise upgrading over rebuilding.
• Design accessibility - Homeowners are engaging professionals earlier, reflecting CO-architecture’s role in making design services more approachable.
• Regional diversity - Demand is spread beyond capital cities, with solid activity across key regional areas.
• Sustainable growth - The shift to energy-efficient homes is driving demand for architects and designers who can integrate sustainability, green technologies, and compliance.

6) Outlook: What We Expect Next

CO-architecture’s data suggests the volume of residential design work will remain steady into 2026, particularly across renovation and interior categories. Consistent project inflows, broad representation across states, and a healthy mix of project types all point to sustained growth, even as the wider construction market cools.

Key focus areas for 2026:

• Expand geographic reach
  Grow brand awareness and member presence in underrepresented states to strengthen national coverage.
• Launch data-led industry insights
  Introduce a Design Activity Index and regular reporting
• Deepen performance and engagement analytics
  Enhance tracking of project conversions, client satisfaction, and member outcomes to continuously improve the platform and demonstrate value to partners.

7) What This Means for Homeowners and Professionals

Taken together, the data points to a residential market that is adjusting, not stalling. While new home construction has slowed, renovation, retrofit and interior projects remain active, and budgets sit firmly in the mid- to high-tier range.

For homeowners, this means:

• There is strong access to architects, building designers and interior designers across most states and regions.
• Engaging a professional early is becoming the norm, particularly where planning, sustainability and energy performance are involved.
• The focus is shifting toward improving and adapting existing homes rather than building new, with design quality and long-term value front of mind.

For professionals, the trends suggest:

• A resilient pipeline of renovation and improvement work, supported by homeowner confidence in property as a long-term asset.
• Growing demand for services that integrate sustainability, compliance and performance upgrades alongside good design.
• Increasing value in clear, transparent communication with clients—well-defined briefs, realistic budgets, and measurable outcomes.

As the broader construction sector works through capacity and supply constraints, the connection between informed homeowners and skilled design professionals will remain central to how Australia’s housing stock evolves over the coming years.

Prepared by CO-architecture - Australia’s design network, based on platform activity and market data from Q1 2025.

CO-architecture is a membership platform built by designers, for designers, empowering professionals through connection, visibility, and opportunity. We develop tools and programs that help architects and designers find projects, grow their studios, and showcase their work within a collaborative design-driven community.