none
none

CONSTRUCTION CAN'T BOOM FOREVER

10-08-2017
by 
in 

Anyone who's paid attention to the Sydney skyline over the past five years will have seen cranes pop up in increasing numbers, as commercial and residential construction continues apace. 

The North Shore has seen a spate of medium-to-high density housing spring up, and the CBD district has (among other projects) seen the Barangaroo development and the construction of the International Convention Centre. 

In the next three years, however, lots of projects are set to tie up and there's not a whole lot being planned to replace them. 

The number of homes being built is forecast to fall 31 per cent during the next three years, according to a report from industry researcher BIS Oxford Economics.

For high-density housing, the prognosis is even grimmer, with the report suggesting that their rate of construction will fall by 50%. 

“Analysis indicates that all states (with the exception of Victoria and New South Wales) are either in balance or oversupply,” BIS Oxford Economics managing director Robert Mellor said.

“With dwelling completions running ahead of underlying demand over the next two years, Australia will swing to a significant national residential stock surplus by 2018-19 ­despite NSW still facing a ­significant stock deficiency.”

BIS also predicts the value of all new builds — including commercial property — will slide from about $107.2 billion at present to $88.9 billion by June 2020.

This fall in construction was also predicted in May by industry analyst Macromonitor, who said that 2019 would be a "trough" for the construction industry. 

"The Sydney and Melbourne markets remain at or near the peak of an extraordinary upturn, which was driven by a long period of low interest rates, previous under-building, an unprecedented flood of foreign investment into residential property, and an influx of people returning to the south-eastern states after the mining collapse in Western Australia and Queensland," said Macromonitor analyst Nicholas Fearnley.

In total, the construction industry could be facing job losses in the hundreds of thousands.  

Related news & editorials

  1. 17.10.2017
    17.10.2017
    by      In
    Opposition leader Bill Shorten has promised that, if elected, Labor will establish a $1 billion "advanced manufacturing" fund. 
    The fund will be intended to "support innovative Australian manufacturing firms who want to grow their businesses and create jobs, but who might find it difficult to... Read More
  2. 12.10.2017
    12.10.2017
    by      In
    Seventy-seven River Murray-based irrigation projects have been offered a share of $38 million in funding under the fourth and final round of the Irrigation Industry Improvement Program (3IP).
    If all projects accept their offers, it will mean a total of 259 projects will have received funding under... Read More
  3. 12.10.2017
    12.10.2017
    by      In
    Technology used to develop the world’s first fully plastic automotive mirror is being adapted in South Australia to make solar energy generation more efficient.
    Adelaide-based car parts manufacturer Precision Components has partnered with the University of South Australia to today launch a... Read More
  4. 12.10.2017
    12.10.2017
    by      In
    The Art Gallery of South Australia is now being powered with the help of large-scale battery as part of an initiative that will soon also connect the State Library of South Australia and Adelaide High School.
    The SIMEC ZEN Energy system provides a total of 64kWh of energy storage to the Art Gallery... Read More