Home Improvement Market

The global Home Improvement Market is valued at USD 431.7 Billion in 2023 and is projected to reach a value of USD 681.3 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 5.9 % between 2024 and 2032.

Key Highlights

• By End Use, the Do-it-yourself (DIY) segment dominated the market in 2023
• Based on Application, the Exterior Replacements segment accounted for the largest market share in 2023
• By Region, Asia Pacific dominated the market in 2023, gaining the major market share above 37.1%
• The Asia Pacific market is expected to grow significantly from 2024 to 2032
• The global Home Improvement market is expected to grow due to the increasing rate of new homes and residential units.
• Increasing access to loans and financial aid from private companies and regional governments is opening up new avenues for growth.

Regional Overview

In 2023, the Asia Pacific Home Improvement market took the lead, capturing 37.1% of the revenue share

In 2023, the Asia-Pacific Home Improvement market will be led by 37.1% of the revenue share due to significant rural development and urbanization efforts in emerging Asian countries. Governments are heavily investing in urban redevelopment and rural housing improvements. For example, China announced significant urban redevelopment investments in July 2023. Rising urbanization, disposable incomes, and home aesthetic awareness contribute to rapid growth. The expanding middle class and urbanization trends drive demand for contemporary housing. Economic prosperity and increased consumer spending on lifestyle upgrades further bolster growth. A robust supply ecosystem for Home Improvement materials, with major concrete suppliers in China and India, also supports this boom. North America is also growing, driven by solar projects and demand for DIY Home Improvement.

The U.S. real estate market's high prices and interest rates drive homeowners to invest in remodelling and renovations, boosting the Home Improvement market. Leading suppliers like The Home Depot and Ace Hardware support this growth. Over 50% of U.S. homes were built before 1980, prompting ongoing updates and repairs, although lifestyle projects may slow. Eco-friendly and intelligent features remain in demand. Households spend an average of USD 3,000 annually on Home Improvement, with over 20% investing between USD 5,000 and USD 15,000. Despite low consumer confidence due to inflation, substantial home equity encourages continued investment. The market is influenced by changing consumer preferences, disposable income, e-commerce growth, and demand for appealing finishes and smart home technologies.

Type Overview

In 2023, the global Home Improvement market saw significant growth, particularly in the Do-it-yourself (DIY) segment, which held a dominant share. The Type segment is divided into Do-it-yourself (DIY), and Do-it-for-me (DIFM).

DIY Home Improvement solutions are in high demand due to the rise of e-commerce sales channels. Buyers choose DIY projects for their affordability, sense of accomplishment, and personalization. These projects involve only end users, with no third parties. The sector will grow due to psychological rewards, social interaction, skill acquisition, adaptability, and resource efficiency. Specialty DIY retailers are set for rapid growth, catering to consumers who prefer hands-on projects. They offer tools, materials, and educational resources, attracting consumers seeking guidance for their DIY projects.

End Use Overview

In 2023, the global Home Improvement market saw significant growth, particularly in the Exterior Replacements segment, which held a dominant share. The End Use segment is separated into Kitchen Upgrades, Bath Upgrades, System Upgrades, Exterior Replacements, Interior Replacements, Property Improvements, and Disaster Repairs.

The Exterior Replacements category generated the most income due to changing consumer perceptions of outdoor leisure. Homeowners invested in new doors, windows, painted walls, and garden accents, enhancing functionality and aesthetics. Exterior repairs like roofing were popular for improving home appearance. The market thrived on consumer preferences for vinyl and polymer siding mimicking natural wood. With more people working remotely, investments in safe exterior environments increased, including gardens, security systems, and seating areas. Landscaping costs ranged from USD 2,500 to USD 14,000 in 2023, reflecting this growing trend.

Key Trends

1. Sustainability and Eco-Friendly Practices: There is a growing emphasis on environmentally friendly and sustainable practices. Consumers are increasingly choosing products that align with their environmental concerns. Market participants respond by developing and offering more eco-friendly options to meet this demand.
2. Smart Home Integration: Technology integration into Home Improvement products is a significant trend. Smart home features like lighting, security systems, and thermostats are becoming standard. Consumers are looking for convenient and innovative solutions to enhance their living spaces.
3. DIY and E-commerce Growth: The DIY trend continues growing, supported by online tutorials and many DIY-friendly products. Additionally, online retail for Home Improvement goods is surging, driven by the convenience and accessibility of e-commerce platforms. Millennials and larger contractors are particularly active in online purchasing, doubling or tripling their online spending compared to older demographics.
4. Emphasis on Health, Wellness, and Urbanization: There is an increasing demand for Home Improvement products that enhance health and wellness, such as those that improve indoor air quality. Additionally, rising disposable incomes and rapid urbanization in developing economies are driving the expansion of the global Home Improvement market. This includes a growing interest in hosting social events at home, leading to increased spending on home renovations, repairs, and decorating.

Premium Insights

The global housing market faces high inflation, mortgage, and interest rates, making homeownership difficult. Consequently, consumers are turning to cost-effective home renovations and improvements. The Home Improvement industry is witnessing unprecedented consumer spending driven by changing lifestyles and preferences.

The rise of DIY culture, online tutorials, and easy access to Home Improvement products have fuelled this growth. Key product segments, including flooring, furniture, kitchen and bathroom upgrades, and outdoor landscaping, are in high demand. Energy-efficient and sustainable solutions are also gaining popularity as environmental awareness grows.

The e-commerce boom has further boosted market expansion by facilitating online purchases. Higher disposable incomes have elevated living standards, driving renovation trends. This flourishing market attracts new companies, spurred by increased funding, aiming to offer innovative services and enhance their position in the industry.

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Market Dynamics

Surging rate of new homes, rising real estate prices, and increased energy demand

The global Home Improvement market is expected to grow due to the increasing rate of new homes and residential units. Exponentially rising real estate prices have made Home Improvement a more attractive option for many. Buying a new house, especially in developed countries, is expensive, leading people to opt for Home Improvement to achieve a well-structured home at lower costs. Additionally, changing global climate conditions and installing solar panels due to increased energy demand, especially in colder regions, drive the market forward.

Volatile prices of raw materials and the need for more skilled professionals

The Home Improvement market faces challenges due to the highly volatile prices of raw materials such as stone, concrete, wood, steel, and masonry. These materials' prices are sensitive to global market conditions, impacting building and construction costs. For instance, the US is experiencing a cement supply shortage, affecting infrastructure projects. Additionally, the rapidly changing trends in home renovation require service providers to stay updated and skilled in the latest technologies and styles, which can be a significant restraint.

Access to loans and financial aid, innovation in materials and techniques, and government investments

The Home Improvement market offers numerous growth opportunities. Increasing access to loans and financial aid from private companies and regional governments is opening up new avenues for growth. For instance, India's Finance Ministry recently approved a new interest subsidy scheme worth Rs 60,000 crore for urban poor home loan initiatives, and Australia's government provided AUD 1 billion for energy-saving measures like solar panel installations. Moreover, businesses that adopt innovation-led strategies and invest in new materials and construction techniques stand to reap exceptional results that meet modern consumer expectations. Government investments in large-scale renovation projects, such as China's USD 137 billion plan for urban villages, also present significant opportunities for market growth.

Competitive Landscape

The Home Improvement market is highly competitive, with significant players striving for market share through innovative products and strategic initiatives. Key industry players, including multinational corporations and regional businesses, focus on product innovation, expanding distribution networks, and forming strategic partnerships. They compete on adapting to consumer preferences, brand recognition, and pricing strategies. Prominent companies like Home Depot, Lowe's, and Amazon offer a wide range of products in stores and online. Investments in research and development are crucial for expanding product lines and driving market growth. To remain competitive, companies aim to offer cost-effective products and often manufacture locally to reduce operational costs. Strategic actions include new product launches, mergers, and collaborations to enhance their global presence.

Recent Market Developments

Kingfisher Announces New E-commerce Platform at Castorama, France

• In March 2024, Kingfisher will announce the opening a Home Improvement e-commerce platform at Castorama, France, marking the next step in the rapid expansion of its marketplace offering. The launch follows the success and rapid growth of Kingfisher's marketplaces at B&Q in the United Kingdom, Brico Dépôt in Spain and Portugal, and the Koçtaş joint venture in Turkey. Castorama France will launch more than 500,000 new products from verified third-party merchants through its e-commerce channels. All third-party merchants will be chosen by Castorama specialists and subjected to a rigorous verification procedure to ensure they fulfil Castorama's quality and ethical requirements.

MarketBlast® Launches Global Product Innovation Search in Thriving Sector

• In October 2023, MarketBlast® announced the launch of a global product innovation search in the thriving Home Improvement sector. The hunt will encompass innovation in tools, hardware, DIY, and Home Improvement, as well as manufacturers and distributors who are actively seeking new and inventive items. The National Hardware Show is the hunt's primary sponsor, as it is the only industry event that brings together the complete Home Improvement community, including corporations looking for new and inventive items to expand their brands.

The Home Depot® Acquires International Designs Group

• In September 2023, The Home Depot®, the largest global Home Improvement retailer, finalized a definitive agreement to acquire International Designs Group (IDG). IDG operates Construction Resources and other design-focused subsidiaries. Construction Resources is a prominent distributor of surfaces, appliances, and architectural specialty products catering to professional contractors involved in renovation, remodelling, residential home building, and multi-family projects.

Great Day Improvements Expands with Acquisition of K-Designers

• In October 2023, Great Day Improvements expanded organically again, incorporating more than 40 locations into its existing brand portfolio. The recent strategic acquisition of K-Designers is a significant step forward for Great Day Improvements, allowing it to enter the California remodelling market.

The global Home Improvement market can be categorized as Type, End Use, and Region.