Cameron St houses for the TV show The Block. Expenditure on renovations increased each time The Block was broadcast.
AUSTRALIANS' addiction to TV renovation shows is well known, but now there's financial proof - we back it up with our wallets.
Economic research undertaken for The Saturday Age suggests the popular reality television show The Block broadcast on Channel Nine earlier this year has a statistically significant impact on the economy when it comes to renovations.
Spending on renovations across the nation was boosted by $251 million each time the series was broadcast, econometric modelling by the Housing Industry Association found.
''The results appear to be surprisingly robust,'' HIA's Economics Group said.
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The final episode of the show, filmed in inner-suburban Richmond, fizzled during the last screening when only one of the contestants' four homes sold at auction, but the entire series appears to trigger a renovation jackpot.
''The model suggests that an airing of The Block in any particular quarter causes a statistically significant boost to renovations six months later,'' said HIA economist Andrew Harvey.
The six-month lag between the show's screening and its economic impact was the result of inspired home owners making a decision to renovate, accessing finance, getting planning approval and then beginning work, Mr Harvey said.
Other factors, such as house prices and interest rates, also had an impact on renovation spending. If interest rates go up in a given quarter, then renovation activity declines three quarters later, the research showed.
''In quarters in which The Block is aired there is, on average, a $251 million boost to quarterly renovations investment two quarters [or six months] following the airing,'' he said.
Mr Harvey said the research focused on that particular reality series because it ''set a benchmark in popularity'' and its television screening schedule made it easier to isolate and study.
Given the impact of The Block, other television renovation shows such as The Renovators, Backyard Blitz, or Renovation Rescue could have had a similar effect depending on their popularity.
Spending on home improvements usually tracks the strength of the housing market and, as a result, has been flat over the past year, BIS Shrapnel economist Robert Mellor said.
''If the property market is strong and getting strong capital growth, then the home improvements market tends to run stronger,'' Mr Mellor said.
''People do more home improvements leading into summer than they do during winter.''
Over the past two years, quarterly spending on renovations has been about $7.7 billion.
If interest rates and house prices stayed constant, the boost from the TV show was about 3.3 per cent, HIA Economics said.
''That's a pretty significant amount,'' Mr Mellor said.
It also explains the interest of advertisers in getting product placement on reality shows, he said.