Online furniture retailer Temple & Webster is largely unfazed by the prospect of falling property prices and the cost of living crunch after exceeding market expectations with a 31 per cent jump in revenue.

The home improvement market has become an increasingly important focus for the business, after launching online-only DIY platform The Build earlier this year.

While rising interest rates have softened property prices and raised the prospect of reduced discretionary spending by households, Temple & Webster boss Mark Coulter said a big chunk of the company’s growth opportunities are not tied to the housing market.

“In terms of general exposure to housing market, it’s really complicated... As property prices get lower, actually it becomes more affordable for younger people, and younger people are our major growth demographic,” he said.

“What we want to make sure is that we still position ourselves as a really great value retailer, if you’re staying [in one house] and redecorating or if you’re moving because you can afford to get into the property market now.”

A large part of the DIY and homewares market is also focused on replacement products, which consumers will purchase if they need them regardless of broader conditions, he said.

“What people don’t realise is that a large part of the category is [replacing] things that break. That kind of general demand isn’t tied to the housing market. A large part of our category is immune to some of those macro forces.”

Temple & Webster shares surged over 26 per cent to trade at $5.57 after the business raised its earnings margin guidance for 2023.

Full-year net profits before tax were down 31 per cent on last year’s numbers, which had been turbocharged due to COVID-19 lockdowns, but the business surprised the market with higher than expected earnings and strong margins.